TROY, MI — ArvinMeritor has reported financial results for its first fiscal quarter, which ended on Dec. 31, 2004.
Chairman, CEO and President Chip McClure said while the business continues to perform well in many aspects, the company’s financial results are still being affected by industry-wide issues such as the escalating costs of steel and other raw materials.
For the first quarter of fiscal year 2005, the company posted sales of $2.1 billion, a nine-percent increase when compared to the same period last year. The company cited certain factors increasing sales during the first three months, including currency translation, which increased sales by approximately $115 million, primarily due to the stronger euro in relation to the U.S. dollar — and higher Commercial Vehicle Systems (CVS) market volumes, which added approximately $105 million in sales. In addition, the formation of two joint ventures with the Volvo Group added approximately $55 million to CVS sales, but this increase was offset by the divestitures of certain previously announced LVS businesses.
Operating income from continuing operations in the first quarter was $36 million, down $6 million from the prior year’s first quarter. The benefits from the higher CVS volumes were offset by higher steel costs and lower Light Vehicle Systems (LVS) volumes. During the first fiscal quarter, which ended on Dec. 31, 2004, steel costs, net of recoveries, increased approximately $30 million, when compared to the same period last year.
Income from continuing operations was $12 million, or 17 cents per diluted share, compared to $15 million, or 22 cents per diluted share, a year ago. (These results are at the mid-point of the company’s guidance provided in November 2004.)
Income from discontinued operations was $6 million, or 9 cents per diluted share, compared to $4 million, or 6 cents per diluted share, last year. Net income, including discontinued operations, was $18 million, or 26 cents per diluted share, compared to $19 million, or 28 cents per diluted share last year.
In the earnings statement, McClure also announced plans to consolidate and combine some of its global plants as well as close or sell underperforming plants. The company will eliminate approximately 400 to 500 salaried positions globally, and delay merit increases for salaried employees.
“We are also significantly reducing the number of contractors, consultants and other discretionary spending, and we will continue to be aggressive in finding opportunities to eliminate waste and reduce costs through our continuous improvement processes and White Shirt program,” said McClure.
The company expects to announce further details and the cost of its restructuring actions in the current fiscal quarter.
For more information, visit the company’s Web site at: http://www.arvinmeritor.com.
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