Ahead of the Bell: ArvinMeritor shares jump

ArvinMeritor Inc. shares rose Wednesday as a Wall Street analyst said the vehicle parts maker's exposure to bankruptcy woes of troubled U.S. automakers is limited.

In premarket electronic trading, Troy, Mich.-based ArvinMeritor added 46 cents, or 28 percent, to $2.09. The company's stock has traded between 32 cents and $18.11 over the last 52-week period.

KeyBanc Capital Markets Inc. analyst Brett Hoselton acknowledged financial risk still remains high for ArvinMeritor, but said it appears manageable.

Hoselton kept his 'Buy' rating and a price target of $5 on the stock, saying he thinks the company's risk related to Chrysler LLC's bankruptcy is minimal given the company's small exposure to the struggling automaker. There is also limited risk related to its exposure to General Motors Co.

Chrysler filed for Chapter 11 bankruptcy protection last week and has been working to close a deal to combine with Italian automaker Fiat.

GM has been working to avoid bankruptcy and restructure the company hard hit by recession and the steep drop in auto sales. GM has been living on $15.4 billion in U.S. government loans and faces a June 1 government deadline to finish restructuring or be forced into bankruptcy protection.

ArvinMeritor on Tuesday reported a $47 million fiscal second-quarter loss on weak 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, compared with 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.