ArvinMeritor on Monday said first quarter earnings fell slightly compared with last year, due to higher steel and raw material costs, and announced restructuring actions that will cut 400 to 500 jobs, the Associated Press (AP) reported.
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Net income declined to $US18 million, or 26 cents per share, from $19 million, or 28 cents per share, a year ago. Earnings from continuing operations fell to $12 million, or 17 cents per share, from $15 million, or 22 cents per share, last year, AP said, adding that ArvinMeritor’s sales rose 9% to $2.09 billion from $1.92 billion in the 2004 period.
Analysts surveyed by Thomson First Call reportedly were looking for the company to post earnings of 23 cents per share in the latest quarter.
The Associated Press said ArvinMeritor also announced a plan to consolidate and combine certain global facilities as well as close or sell underperforming plants. In addition to these actions, the company said it would eliminate about 400 to 500 salaried positions around the world and delay the merit increase for its salaried employees.
According to the report, ArvinMeritor also said it is significantly reducing the number of contractors, consultants and other discretionary spending, and will continue to be aggressive in finding opportunities to eliminate waste and reduce costs.
Looking ahead, ArvinMeritor said it expects second-quarter earnings from continuing operations to range between 30 cents and 35 cents per share, on revenue of about $2.3 billion, AP said, noting that analysts are forecasting profit of 52 cents per share.
The company reportedly said that although it expects steel costs to be higher than previously estimated, ArvinMeritor continues to maintain a full-year outlook of $1.60 to $1.80 per share on sales of about $8.9 billion. Second-quarter and full-year guidance do not include additional restructuring actions that will be announced in the current quarter.
Analysts are forecasting full-year earnings of $2.29 per share on sales of $8.64 billion, AP said.
The Associated Press said the company’s fiscal 2005 outlook for light vehicle production is 15.8 million vehicles in North America and 17 million vehicles in Western Europe. The forecast for North American Class 8 truck production is 302,000 units in fiscal 2005, up from the 275,000 units previously cited.
