Lower North American truck sales led to lower financials compared to a year ago for two Indiana-based companies.
Accuride Corp. (NYSE: ACW) said it had a net loss of $5.2 million compared to one of $600,000 a year earlier, or a loss of 10 cents per share, 4 cents more than a consensus estimate by Zacks Investment Research. It compares to a loss of 1 cent in the first quarter of 2015.
The Indiana-based company reported first quarter adjusted earnings before interest, taxes, depreciation and amortization (EBITDA ) was $15 million compared to $21.3 million a year earlier.
First quarter 2016 revenue totaled $160.9 million, down 12.4% from the same period a year ago. The decrease was driven by $19.4 million related to the continued softness in demand at the company’s foundry, Brillion Iron Works, as well as $12.8 million in pricing related to the pass-through of lower raw material costs and $4.9 million due to lower demand in North America wheels, according to the company.
President and CEO Rick Dauch said the overall results were within expectations as the company dealt with several headwinds including lower North America Class 8 truck demand.
Accuride’s wheels segment reported net sales of $105.4 million, down 2.7%, while its Gunite wheel ends business had net sales of $38.7 million, up 2.6%. Brillion Iron Works net sales totaled $16.8 million, down 55.2% from the first quarter of 2015, primarily due to reduced end market demand from customers in the oil and gas, agricultural and mining markets, according to the company.
Accuride expects 2016 revenue to be in the range of $650 million to $700 million, with adjusted EBITDA in the range of $65 million to $80 million.
Weaker Truck Demand Pushes Cummins Sales Lower
Meantime, fellow Hoosier Cummins Inc. (NYSE: CMI) reported net income slid to $321 million, or $1.87 per share, from $387 million, or $2.14 per share, in the first quarter of 2015. Despite the decline, the per share performance was 10 cents better than Wall Street expectations.
First quarter revenue of $4.3 billion dropped 9% from the same quarter a year earlier amid lower production in the North American heavy-duty truck market and weak global demand for off-highway and power generation equipment, according to the company. Also, currency exchange rates hurt revenues by approximately 3%, primarily due to a stronger U.S. dollar.
Earnings before interest and taxes (EBIT) in the first quarter were $484 million, down from $562 million a year ago. Overall revenues in North America fell 10%. International sales dropped 8%, as revenue in Latin America and Asia declined the most.
“Our results for the first quarter reflect solid execution of our cost reduction plans in the face of very challenging market conditions,” said Rich Freeland, chief operating officer. “Benefits from restructuring actions, material cost reduction projects and lower warranty costs all helped to mitigate the impact of lower sales.”
First quarter engine sales totaled $2.3 billion, down 10% from the first quarter of 2015, due to lower production in the North American heavy-duty truck market, as well as weak demand in power generation, oil and gas, commercial marine and mining markets, according to the company.
Cummins expects full year 2016 revenues to be down 5% to 9%, the same as its forecast three months ago.