CHICAGO -- Auto parts maker ArvinMeritor Inc. on Monday posted a quarterly net loss after taking an impairment charge for the planned sale of its aftermarket auto parts business.
ArvinMeritor, whose shares were off 5 percent, said rising steel costs hurt quarterly results and the supply and price would remain challenging in fiscal 2005 as it looks for some help from customers and steel suppliers.
The net loss amounted to $153 million, or $2.23 per share, for its fourth quarter ended Sept. 30, compared with a profit of $34 million, or 50 cents a share, a year earlier.
Excluding the goodwill impairment charge of $190 million, or $2.27 per share, ArvinMeritor earned $37 million, or 54 cents per share. Analysts on average expected ArvinMeritor to earn 54 cents per share, according to Reuters Estimates.
ArvinMeritor on Oct. 28 said it planned to sell a metal coil-coating business and its larger replacement car parts business to focus on parts sales to automakers, truckmakers and the replacement truck parts market. It recorded them as discontinued operations on fourth-quarter results.
The price and scarcity of steel hurt results, ArvinMeritor said. Gross steel costs rose about $50 million in the fourth quarter and about $100 million for the fiscal year.
Sales from continuing operations rose 18.6 percent to $2.01 billion in the quarter, the Troy, Mich., company said. Light-vehicle systems-related sales rose 3 percent to $1.12 billion, but heavy truck-related sales rose 46 percent to $899 million on higher volume in North America and western Europe.
ArvinMeritor, which makes heavy-duty truck axles and brake systems as well as numerous other truck and car parts, expects continued support from strength in heavy truck sales.
"While we believe our (truck systems) business group will benefit from higher volumes, we will continue to face challenges posed by the availability and higher price of steel," Chairman Charles McClure said in a statement.
The company is looking for new steel sources and alternate materials to use in its products as well as talking with steel suppliers and its customers, McClure said.
ArvinMeritor said it expects earnings per share from continuing operations of 15 cents to 20 cents in its fiscal first quarter with sales of about $2 billion. It expects fiscal 2005 earnings per share from continuing operations of $1.60 to $1.80 with sales rising about 5 percent to $8.4 billion.
Analysts on average expect ArvinMeritor to earn 55 cents per share in the fiscal first quarter and $2.49 per share for fiscal 2005, according to Reuters Estimates.
The fiscal 2005 outlook is based on light-vehicle production of about 15.9 million vehicles in North America and 16.8 million vehicles in western Europe. It also assumes North American Class 8 truck production of 275,000 units.