CHICAGO -- American Axle & Manufacturing Holdings Inc. on Thursday reported a 6 percent rise in quarterly net profit as it sold more light-truck parts and reduced costs in the face of lower auto industry production.
The auto parts maker also said it expects to report higher earnings, excluding debt refinancing costs, despite slightly lower sales in 2004.
American Axle shares reached their highest level in more than a year early Thursday, before giving back some of the gains.
Detroit-based American Axle, which makes components for the Dodge Ram pickup and Hummer H2 sport utility vehicle, said third-quarter net income rose to $38.7 million from $36.5 million a year ago.
The company said its sales rose to a record $867.7 million from $828.7 million a year ago.
"The company grew its content per vehicle, generated strong cash flow and reduced debt," Merrill Lynch analyst John Casesa, who rates the stock a "buy" and whose firm has an investment banking relationship with American Axle, said in a research report.
The maker of axles, driveshafts and chassis said it increased the amount of content it provides per vehicle despite a 5 percent drop in industrywide North American light vehicle production.
It also benefited from a 2 percent rise in third-quarter production of light trucks at General Motors, its largest customer and the world's biggest automaker.
Stronger sales of components for the Dodge Ram and GM's full-size pickups and SUVs were offset by lower production of Chevrolet Astro and and GMC Safari mid-size vans.
American Axle said it expects a slight increase in North American industry light vehicle production in 2004 to 16.3 million units.
The company also said changes in its product mix will offset new business growth of about $100 million, resulting in a slight decrease in its 2004 sales.
Robin Adams, American Axle's chief financial officer, said 2004 is a transitional year as new business comes on line that will restore top-line growth. Productivity improvements will bolster income in 2004 despite the lower sales outlook, he said.
"Next year will be a little bit unique for us, but we expect to be back on track in 2005," Adams told Reuters in an interview.