ArvinMeritor slides to 2Q loss as demand slows

ArvinMeritor Inc. on Tuesday reported a $47 million fiscal second-quarter loss, reversing a year-ago profit, as the vehicle parts maker struggled with low demand for its products amid tough times for automakers.

The company said its loss totaled 65 cents per share for the quarter that ended March 31, versus a profit of $20 million, or 28 cents per share, during the same period last year. Excluding one-time items and discontinued operations, ArvinMeritor said it would have posted a loss of 12 cents per share in the latest period.

Revenue fell 38 percent to $1.11 billion from $1.78 billion a year ago.

Analysts surveyed by Thomson Reuters were expecting a loss of 68 cents per share on higher revenue of $1.24 billion, on average.

The sales dropoff "is primarily due to significantly lower production volumes in most original equipment markets globally," the company said.

ArvinMeritor said it did benefit from a one-time, $12 million adjustment because it eliminated nearly all of its variable incentive compensation. The company has said it is cutting about $430 million a year in costs, including savings it expects will total $311 million during the current fiscal year.

"While current market conditions remain depressed, North America and South America are showing signs of stabilization, and certain markets in Asia are indicating slight signs of improvement, offsetting continued declines in Europe," the company said.

For the first half of the year ArvinMeritor has lost $1.04 billion, or $14.34 per share, versus a first-half 2008 profit of $8 million, or 11 cents per share. Sales have fallen 28 percent to $2.48 billion from $3.44 billion a year ago.

But ArvinMeritor warned it expects third-quarter losses to increase from second-quarter results as revenue remains flat sequentially. Analysts were expecting third-quarter losses to shrink to 43 cents per share as revenue climbed to $1.48 billion.

The weak outlook sent shares tumbling 21 cents, or 12.9 percent, to $1.42 in late trading, after closing the regular session up 22 cents, or 15.6 percent, at $1.63 before the results were released.

ArvinMeritor said it will be impacted by Chrysler LLC's plan to idle its facilities during the bankruptcy process. The company anticipates a 30-60 day shutdown will cut earnings before interest, taxes, depreciation and amortization by $2 million to $5 million.