At a time when auto parts suppliers are reporting hefty losses, Troy-based ArvinMeritor Inc., last week announced that its fiscal third quarter net income rose, despite declining North American auto production. And the company says it still sees earnings for 2008 at the high end of its target.
How did ArvinMeritor do it? For one thing, the weak dollar had a positive impact on foreign sales. Overall, the company reported sales rose 21 percent to $2 billion.
In July, the parts manufacturer said it expected a 20 percent revenue surge, to about $2 million, despite slumping U.S. auto sales. Back then, the company was optimistic about stronger industry conditions and market share in South America and Asia Pacific.
Looking ahead, ArvinMeritor still sees 2008 earnings, excluding items, at the top end of $1.40 to $1.60 a share. Sales from continuing operations are projected at $7.1 billion to $7.3 billion, and the company expects overall North American light-vehicle sales of 14.4 million to 14.6 million. Analysts expect profits of $1.45 a share on revenue of $7.22 billion.
ArvinMeritor, which is spinning off its body and chassis system operations, reported fiscal third-quarter net income of $44 million, or 60 cents a share, compared with a year-earlier net loss of $70 million, or 99 cents a share. Excluding items, earnings from continuing operations tripled to 77.
The company says the proposed spinoff, which was announced in May, will achieve about $2.9 billion in revenue within the next two years, and will be known as Arvin Innovation. The deal is expected to be wrapped up within a year.
– By Ed Coury, senior editor and Midwest bureau chief for the Wall Street Journal Radio Network, Dow Jones & Co., and a reporter for WWJ Newsradio 950.
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