From Bloomberg News
DETROIT — American Axle & Manufacturing Holdings Inc., the world’s second-largest maker of automotive drive systems, said first-quarter profit fell 32 percent as General Motors Corp. cut light-truck production and bought fewer parts.
Net income fell to $36.5 million, or 66 cents a share, from $54 million, or $1.02, a year earlier. The Detroit company said sales dropped 2.3 percent to $952.8 million from $975.3 million.
American Axle’s sales were hurt after GM cut production of light trucks such as the GMC Canyon by 5 percent in the quarter compared with a year ago. The parts supplier, formed in 1994 with plants bought from GM, gets more than 80 percent of its sales from the automaker.
“This was a challenging quarter” for American Axle, “with GM truck volumes down year-over-year by 4.4 percent,” Merrill Lynch analyst John Casesa said in a research note.
American Axle’s sales to non-GM customers rose 13 percent to $190.8 million, or about 20 percent of total sales. Sales of parts for DaimlerChrysler AG’s heavy-duty Dodge Ram pickup truck also increased.
A two-day strike in February at six of the company’s plants added $5.2 million, or 6 cents a share, in costs to the quarter, Chief Executive Officer Richard Dauch said on a conference call with analysts and investors. The strike caused GM to halt production at three plants.
American Axle expects to earn $1 to $1.05 a share in the second quarter. The estimate includes $13 million, or 16 cents, in costs related to the company’s buyout program for UAW workers. Excluding those costs, it expects $1.16 to $1.21.
The company discussed employment during negotiations with the UAW and “fashioned an agreement that allowed us to offer buyouts to our associates,” said Patrick Paige, vice president of human resources, in an interview with Bloomberg News.
Almost 250 employees have voluntarily accepted the offer, Paige said. He said the number would not increase.
Excluding $23.5 million, or 28 cents, related to debt financing, the company earned 94 cents a share in the first quarter, 2 cents more than the average estimate from 11 analysts surveyed by Thomson Financial.
Shares of American Axle rose Friday 60 cents to $38.41.
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