The decline of North American Class 8 truck production outpaced ArvinMeritor’s ability to lower fixed costs
and was a major factor in deteriorating second quarter profits, the company said.
ArvinMeritor Commercial Vehicle Systems sales were $583 million for the fiscal quarter ending March 31, down 27% from the comparable period last year. CVS operating margin was 1.7%, down from 8.8% a year ago and 2.2% the previous quarter.
Overall, the company reported second quarter sales of $1.8 billion, down 13% from last year; and net income before special items of $27 million, down 64% from a year ago.
"Reduced build rates for North American Class 8 trucks and light vehicles, softness in demand in our replacement markets, coupled with weaker European currencies, continue to have a negative impact on our revenues and earnings," said Larry Yost, chairman and CEO.
ArvinMeritor Light Vehicle Systems sales were $951 million, down slightly from $978 million last year. LVS operating margin fell to 6.5% from 6.9% a year ago but was slightly better than the 6% margin reported in the previous quarter.
Light Vehicle Aftermarket sales were $216 million, down 11% from second quarter last year. LVA operating margin was 3.7% versus 4.1% last year, but an improvement from the 1.5% margin reported first quarter.
Yost said they have revised an earlier forecast for North American Class 8 production from 160,000 units to 135,000 units, due to the continued backlog of new and used trucks. ArvinMeritor’s estimate for light vehicle production is unchanged at 15.9 million for North America and 16.5 million for Europe.