ArvinMeritor posts 3Q loss, will sell wheels unit
TROY, Mich. — Auto parts supplier ArvinMeritor Inc. posted a $162 million loss Tuesday for its fiscal third quarter as worldwide vehicle production fell and said it has agreed to sell its wheels business, the latest in a series of divestitures.
The company said it expects lower revenue and a wider loss per share for the current quarter than in the third quarter. But it still expects to be in compliance with debt convenants next month.
Its shares fell more than 9 percent Tuesday.
ArvinMeritor said it is selling the wheels business, a division of its LVS segment, to Iochpe-Maxion S.A. of Brazil for $180 million.
It expects the deal to close on or before Sept. 23, prior to the end of its fiscal fourth quarter, subject to approvals in the U.S., Mexico and Brazil.
The sale comes after shedding several other units, including most of its chassis systems business, as it focuses on its commercial vehicles business. Parts of the chassis systems divestiture were completed in the most recent quarter.
ArvinMeritor, which makes integrated systems, modules and components for commercial trucks and light vehicles, said it lost the equivalent of $2.23 per share in the quarter ended June 30, compared with a profit of $44 million, or 60 cents per share, in the year-ago period. The results included discontinued operations.
Excluding the units being sold, the loss was 39 cents per share. Further adjusting for 9 cents per share in restructuring charges, a penny per share in separation costs and 4 cents in non-cash charges related to tax matters, the loss from continuing operations was 25 cents per share.
Analysts polled by Thomson Reuters, on average, expected a loss of 31 cents per share and their estimates typically exclude one-time items.
Sales fell 47 percent to $993 million from $1.88 billion last year. The drop reflected lower production of vehicles worldwide, the company said. Excluding the impact of foreign exchange, sales fell 42 percent. Analysts were looking for higher revenue of $1.21 billion.
Commercial vehicle systems sales plunged 49 percent, to $683 million, while light vehicle systems sales dropped 40 percent to $310 million.
ArvinMeritor said it has identified actions that should allow it to meet its debt covenants in September, including the sale of the wheels business. The company is in negotiations with potential lenders for a replacement for its U.S. securitization program, and expects to complete a deal by the end of the month. If it is unable to complete the necessary actions before the September deadline, it will seek an amendment or waiver on its revolving credit agreement.
Chairman, CEO and President Chip McClure said “market conditions will remain tough” through the current quarter. Markets remain depressed in North America and Europe, the company said, but South America and Asia Pacific are showing signs of improvement.
Nevertheless, the company expects revenue for the fiscal fourth quarter to drop below third-quarter levels, and the loss per share to be greater. It did not offer specific guidance, but the statement implied it will miss Wall Street forecasts.
Analysts expect a fourth-quarter loss of 5 cents per share, on revenue of $1.26 billion.
ArvinMeritor shares fell 64 cents, or 9.3 percent, to close at $6.25.
Related News
YRC Worldwide unit inks agreement with Minera Chinalco Peru involving copper productionOctober 1st, 2009 YRC Worldwide unit inks Minera Chinalco Peru dealOVERLAND Park, Kan. — A unit of trucking company YRC Worldwide Inc.
Perry Ellis inks deal to distribute Pierre Cardin sportswear in US department storesAugust 28th, 2009 Perry Ellis signs deal to distribute Pierre CardinNEW YORK — Apparel maker Perry Ellis International Inc. said Thursday it inked a five-year licensing deal with S.A.R.L.
E.W. Scripps posts 2nd-quarter profit after recording year-ago loss on impairment chargeAugust 10th, 2009 E.W. Scripps posts 2nd-quarter profitCINCINNATI —Media company E.W. Scripps says it made a profit in the second quarter despite a decline in revenue.
Production cuts, bankruptcies at GM and Chrysler make for tough quarters for suppliersAugust 6th, 2009 Automakers' shutdowns drive suppliers' 2Q lossesNEW YORK — With global auto production still in a slump and two of the U.S. automakers in bankruptcy protection, it wasn't a big surprise that the second quarter was another tough one for auto suppliers.
Weyerhaeuser posts wider 2Q loss as weak demand hurts salesJuly 31st, 2009 Weyerhaeuser posts wider loss in second quarterFEDERAL WAY, Wash. — Weyerhaeuser, one of the world's largest forest product companies, says it lost $106 million in the second quarter as the slumping housing market kept demand low for its timber and wood products.
Michelin posts euro122 million loss as crisis in automobile market shrinks demand for tiresJuly 31st, 2009 Michelin posts first-half lossPARIS — French tire maker Michelin on Friday posted a net loss of euro122 million ($172 million) in the first half as car- and truckmakers slashed production and as the company incurred costs for restructuring. The quarterly loss compared to net profit of euro430 million a year earlier.
Air Reserve officer says military air crew was unaware massive cargo plane had lost 2 wheelsJuly 24th, 2009 Military air crew was unaware C-5 had lost wheelsCHICOPEE, Mass. — The military says the crew of a huge C-5 transport plane did not realize that two wheels had fallen off during a training flight in western Massachusetts until after they were alerted by an air traffic controller.
Pepsi buys 20 percent of Calbee Foods, will sell snacks and other food products in JapanJune 24th, 2009 Pepsi inks deal to produce, sell snacks in JapanNEW YORK — PepsiCo Inc. on Wednesday said it struck a deal to buy 20 percent of Japan's largest snack company, with which it will produce and sell snacks and other foods in the Asian nation.
Under deal, $534M in stop-loss bonuses would be paid to US service membersJune 12th, 2009 Deal provides $534M in stop-loss bonusesWASHINGTON — The House and Senate have worked out a compromise to give a $500 retroactive bonus to soldiers for every month they were forced to stay in the military beyond their enlistment term since the Sept. 11 terrorist attacks.
Weyerhaeuser posts 1st-qtr loss on weak housing market but adjusted results top estimatesMay 5th, 2009 Weyerhaeuser posts 1st-qtr loss on weak housingFEDERAL WAY, Wash. — Weyerhaeuser Co.
Ford posts $1.4 billion 1Q loss, burns through less cash while restructuring without gov't aidApril 24th, 2009 Ford posts $1.4 billion 1Q loss, burns less cashDEARBORN, Mich. — Ford Motor Co.
Ranbaxy posts Rs.1,045 crore net loss in 2008March 30th, 2009 MUMBAI - Leading drug maker Ranbaxy Laboratories Monday reported a net loss of Rs.1,044.8 crore ($204 million) for 2008 as against a net profit of Rs.617.7 crore in the previous year. However, the company's total income went up 9.85 percent to Rs.4,681.7 crore in 2008 from Rs.4,261.9 crore in 2007.
Birla Tyres to shut down Orissa unit third timeFebruary 5th, 2009 BHUBANESWAR - Birla Tyres, a unit of the BK Birla Group company Kesoram Industries, will close down its Orissa plant temporarily for the third time in as many months from Feb 16 to Feb 28 on account of falling sales, a company official said Friday. The unit had shut down operations for about 15 days in December and 13 days last month.
Birla Tyres shuts down Orissa unitJanuary 18th, 2009 BHUBANESWAR - Birla Tyres, a unit of the BK Birla group company Kesoram Industries, Monday closed down its Orissa plant temporarily on account of falling sales, a company official said. 'The plant will be closed till January 31 because of falling demand,' a senior official at the unit told IANS on condition of anonymity because he is not authorised to speak to the media.
NTPC's Chhattisgarh unit begins commercial energy productionJanuary 1st, 2009 RAIPUR - The second 500 MW stage-II unit of the state-owned National Thermal Power Corp's (NTPC) Sipat project in Chhattisgarh has begun commercial production, a company official said Friday. The approved capacity of Sipat Super Thermal Power Project, located some 140 km from here in Bilaspur district, is 2,980 MW.
Loading ...