American Axle & Manufacturing Holdings on Friday reported increased profit thanks to demand for GM's new full-size sport-utility vehicles and a move to diversify its own customer base.

The drive train specialist reported second-quarter earnings of $US20.4m, or 40 cents a share, compared with $18.9m, or 37 cents a share, a year ago, according to Dow Jones Newswires.

The report said the latest quarter included a charge of $2.4m, or 3 cents a share, related to a debt write-down, and an unfavourable tax adjustment of $2.6m, or 5 cents a share.

Sales rose in the latest three months to $874.6m from $867.7m in the same period a year earlier, but fell short of analyst expectations of $883.4m, the news agency said, adding that the company expects its full-year 2006 earnings to be in the range of $1 to $1.10 a share.

Dow Jones noted that much of American Axle's second-quarter strength could be tied to the early success of GM's GMT-900 SUV range - including the Chevrolet Tahoe and Cadillac Escalade - for which it supplies drive line parts.

Despite GM's broad weakness in North America and falling US market share, it has been pumping out the high-profit SUVs at a steady pace, the news agency noted.