TROY, MI — ArvinMeritor reported financial results for its second fiscal quarter, which ended March 31.
The company posted sales of $2.3 billion in the second quarter of fiscal year 2006, up three percent from the same period last year.
Operating income was $50 million, up $55 million compared to the same period last year. Excluding $17 million of restructuring costs, operating income would have been $67 million in the second quarter of fiscal year 2006.
Income from continuing operations, before special items, was $28 million or 40 cents per diluted share. Special items consisted of $10 million of after-tax restructuring costs, $6 million of after-tax costs associated with the company’s $600 million debt tender offer and $19 million of tax benefits primarily resulting from the resolution of various worldwide tax audits.
Income from discontinued operations was $14 million, or 20 cents per diluted share. Included in income from discontinued operations was an after-tax net gain on the sale of the Purolator filters business and aftermarket exhaust business of $22 million. The company also recorded $12 million of after-tax impairment charges in certain other LVA businesses. Loss from discontinued operations was $12 million in the same period last year.
Net income for the total company was $45 million, or 64 cents per diluted share, compared to a net loss of $33 million in the second quarter of last year.
The company’s fiscal year 2006 outlook for light vehicle production is 15.6 million vehicles in North America and 16.4 million vehicles in Western Europe. The forecast for North American Class 8 truck production is 340,000 units for fiscal year 2006, up from our prior guidance of 325,000 units. The forecast for heavy and medium truck volumes in Western Europe is 425,000 units, up from our previous forecast of 421,000 units.
For the third quarter of fiscal year 2006, the sales forecast for continuing operations is $2.4 billion. The company’s outlook for diluted earnings per share from continuing operations for the third quarter is 60 cents to 70 cents, before special items.
ArvinMeritor is updating its full-year guidance for fiscal year 2006. Sales from continuing operations are expected to be approximately $8.8 billion. Earnings per diluted share, before special items, are expected to be in the range of $1.60 to $1.70, revised from the previous guidance of $1.50 to $1.70. The outlook for free cash flow remains in the range of $120 million to $170 million for fiscal year 2006.
ArvinMeritor Chairman, CEO and President Chip McClure said, “The actions we implemented to retire debt strengthened our balance sheet, improved liquidity and positioned the company for sustained financial stability. We are very pleased with the results of these efforts, and will continue to work on improving the company’s performance by completing our restructuring actions and focusing on strong operational performance.”
McClure added that continued high volumes in the commercial vehicle market and interest expense savings from the debt reduction actions completed in the second quarter were primary drivers for revising the company’s full-year forecast.
“Looking forward, we are taking steps to minimize the effect on our future earnings and free cash flow related to the anticipated decline in the 2007 North American heavy truck market,” he continued. “We expect improved productivity in our trailer business, continued growth in the commercial aftermarket business and increased sales from our Commercial Vehicle Emissions group.”
For more information about ArvinMeritor, go to: www.arvinmeritor.com .
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