From Detroit Free Press
TROY, MI– Auto-parts supplier ArvinMeritor Inc. posted a loss in the latest quarter, due mainly to a charge for the planned sale of its aftermarket parts business.
For the fiscal fourth quarter ended Sept. 30, the Troy-based company reported Monday a net loss of $153 million, or $2.23 a share. That compares with last year’s net income of $34 million, or 50 cents a share.
Sales increased 19 percent to $2.01 billion from $1.7 billion.
The latest results include a previously disclosed noncash impairment charge of $190 million, or $2.77 a share, for the sale of ArvinMeritor’s light-vehicle aftermarket business, which makes exhaust, suspension parts and filters. (An impairment charge means the asset sold for less than its book value.)
Last month, the company said it would also sell its coil-coating subsidiary, Roll Coater Inc., to focus on manufacturing and assembling car and truck parts.
Excluding the charge, ArvinMeritor said earnings would have been $37 million, or 54 cents a share, compared with the previous year’s $38 million, or 56 cents a share.
Analysts surveyed by Thomson First Call had forecast, on average, earnings of 51 cents a share, excluding items.
The company will continue to sell off assets and products that aren’t market leaders because “we are in a period of change to better meet the complex challenges we face,” chairman and CEO Charles G. McClure told analysts and investors during a conference call.
The chief executive said it would be premature to say what else might be sold. McClure said he also intends to improve the efficiency of existing plants and expand production in countries such as China and India.
The company might close factories that aren’t cost-efficient, he said, without giving details.
ArvinMeritor shares closed up $1.58, or 7.8 percent, to $21.97 in New York Stock Exchange composite trading Monday. That was the biggest one-day percentage rise since March 21, 2003. The stock is down 8.9 percent this year.
ArvinMeritor noted that the rising price of steel affected results. “We have seen gross steel costs increase by approximately $100 million, of which $50 million was incurred in the fourth quarter,” McClure said in a statement.
ArvinMeritor anticipates first-quarter earnings from continuing operations of 15 cents to 20 cents a share and fiscal 2005 earnings from continuing operations of $1.60 to $1.80 a share.
For the year ended Sept. 30, the company reported a net loss of $42 million, or 61 cents a share, compared with net income of $133 million, or $1.96 a share, in fiscal 2003. Sales climbed 19 percent to $8.03 billion from $6.72 billion.
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