US: AAM profitability improves
American Axle & Manufacturing (AAM) results in the fourth quarter of 2009 were net earnings of US$48.6m or $0.80 per share. This compares to a net loss of $112.1m, or $2.17 per share, in the fourth quarter of 2008.
AAM recorded a Q4 tax gain of $48.8m (or $0.80 per share) to recognize the benefit of a special US tax refund claim related to newly enacted legislation providing for a special five-year net operating loss carryback election. Q4 2008 results included a tax expense provision of $69.5m, primarily relating to non-cash charges to establish and adjust valuation allowances on AAM's US and UK deferred tax assets.
AAM's results in the fourth quarter of 2009 also include a net charge for special items of $8.5m (or $0.14 per share).
Q4 sales of $464.0m were 13% higher than the third quarter of 2009 and operating income of $29.0m was 6.3% of sales.
AAM's net loss for the full year 2009 was $253.1m, or $4.81 per share versus a net loss of $1.2bn, or $23.73 per share, in 2008.
Full year results reflected restructuring costs and other special items of $17.8m (or $0.34 per share).
Net sales for the full year 2009 were $1.5 billion as compared to $2.1bn in 2008. Customer production volumes for the North American light truck and SUV programs AAM currently supports for GM and Chrysler were down approximately 30% in 2009. AAM's results in 2009 were also adversely impacted by the extended production shutdowns of GM and Chrysler. AAM estimates the reduction in sales and operating income resulting from these shutdowns to be approximately $304m and approximately $95m (or $1.81 per share), respectively.
AAM's updated 2010 outlook is based on the assumption that the U.S. Seasonally Adjusted Annual Rate (SAAR) of light vehicle sales increases from approximately 10.4m vehicle units in 2009 to a range of 11.0m - 11.5m vehicle units in 2010. AAM expects full year 2010 sales to range from $1.9bn to $2.1bn. This represents annual sales growth of approximately 25% - 40% on a year-over-year basis as compared to the full year 2009.
AAM expects to be profitable and generate EBITDA in the range of 12% to 15% of sales in 2010.