American Axle & Manufacturing Holdings, a maker of driveshafts that counts General Motors as its biggest customer, on Thursday said quarterly earnings fell 66% due to a slump in US auto production and higher steel costs, the Associated Press (AP) reported.
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Second-quarter profit reportedly fell to $US18.9 million, or 37 cents per share, from $55.3 million, or $1.02 per share, last year. Payments for voluntary separation programmes lowered earnings per share by 12 cents in the latest quarter and 15 cents in the year-ago period while revenue fell 6.7% to $867.7 million from $929.6 million.
Excluding the severance payments, the company topped Wall Street projections for profit of 45 cents per share on sales of $852.1 million, according to analysts polled by Thomson Financial, AP said.
The company reportedly said the sales slump reflected an estimated 10% decline in production volumes for the major North American light truck programmes it supports.
The Associated Press noted that American Axle and other auto suppliers have been hurt during the past several quarters due to a drastic reduction in vehicle production at GM and Ford. Both automakers have seen sales plummet as consumers put off large purchases because of skyrocketing petrol prices and rising interest rates.
AP also noted that the company derives nearly 80% of its revenue from work with General Motors – during the quarter, American Axle reported non-GM related revenue of $185 million, or 21% of total sales.
