TROY, MI — ArvinMeritor reported sales of $2.2 billion and net income of $19 million, or $0.28 per diluted share, for its first fiscal quarter, which ended Dec. 31, 2003. This is compared to the prior year’s first-quarter net income of $32 million, or $0.47 per diluted share. Results for the first quarter of 2004 include a net charge of $0.09 per diluted share as a result of the company’s decision to withdraw its tender offer to acquire all of the outstanding shares of Dana Corp. This charge includes $16 million of pre-tax costs, partially offset by a pre-tax gain of $7 million on the sale of Dana stock owned by the company.
Sales increased $471 million, or 28 percent, as compared to the prior year’s first quarter. Foreign currency translation, driven primarily by the stronger euro, favorably impacted sales by approximately $135 million, and the company’s acquisition of Zeuna Starker added sales of $203 million in the first fiscal quarter. Sales would have been up approximately eight percent without these items, said the company, as compared to the first quarter of 2003, primarily as a result of strong North American Class 8 truck volumes.
ArvinMeritor Chairman and CEO Larry Yost said that while the company’s light vehicle and aftermarket businesses fell short of their financial targets, the company expects to see improvements throughout the year, through efforts to reduce costs and improve operating performance.
Operating income for the first quarter of fiscal year 2004 was $49 million, which included $16 million of costs related to the withdrawn tender offer for Dana. Operating income was also impacted by pension and retiree medical costs, which were $9 million higher than the same quarter in 2003, and by premium product launch costs of $6 million.
“Our fiscal year 2004 outlook for light vehicle production is 16.1 million vehicles in North America, up slightly from our previous estimate of 15.8 million vehicles. Our light vehicle production outlook for fiscal year 2004 in Western Europe is 16.6 million vehicles, up from our previous estimate of 16.2 million. Our current outlook for Class 8 truck production in North America remains unchanged from our previous estimate of 222,000 units for fiscal year 2004,” Yost said.
“We remain focused on taking costs out of our businesses, while continuing to invest in our future growth, by offering engineering and technology that meet our customers’ requirements,” said Yost. “We continue to look for ways to improve our return on invested capital by reducing fixed costs and focusing our capital on those activities that add value to our shareowners. Our recent announcement of our intent to sell our Kenton, Ohio, trailer-beam fabrication facility to Sypris Solutions is another example of this ongoing effort.”
For more information, visit the company’s Web site at: www.arvinmeritor.com.
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