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American Axle loss widens, shares plunge
Auto parts supplier AmericanAxle & Manufacturing Holdings Inc (AXL.N) reported a widerquarterly loss due to tumbling production volumes by majorautomakers, sending its shares down 21 percent.
American Axle said it is suspending quarterly cashdividends in 2009 and will continue to trim hourly and salariedlabor costs, after cutting 3,000 jobs last year in response toa deep downturn in auto sales.
The parts supplier, which had $400 million in liquidity atthe end of 2008, also said it is in compliance with its debtcovenants and is on track to return to profitability in 2009but gave no detailed financial guidance.
'There are too many material uncertainties surrounding theeconomy and our industry,' Chief Financial officer Mike Simontetold analysts and reporters on a conference call.
'We don't know what is going to happen, we are not going tospeculate on the outcomes, what we can say is we understand therisks we face,' Simonte said.
American Axle, which relies on General Motors Corp (GM.N)for about three-quarters of its sales, was hurt by the No.1U.S. automaker's steep production cuts in 2008 as auto salesfell to their lowest level in decades.
The net loss came to $112.1 million, or $2.17 per share, inthe fourth quarter, compared with a year-earlier loss of $26.8million, or 52 cents per share.
Sales fell 33 percent to $503.0 million.
American Axle's quarterly results were also hit by $69.5million in noncash charges related to deferred tax assets.
Excluding one-time items, American Axle posted a loss of 96cents per share. On that basis, analysts surveyed by ReutersEstimates had forecast a loss of 69 cents per share.
Barclays Capital analyst Brian Johnson said American Axle'scurrent liquidity of $400 million is adequate for its'immediate needs.'
American Axle said it is suspending quarterly cashdividends in 2009 and will continue to trim hourly and salariedlabor costs, after cutting 3,000 jobs last year in response toa deep downturn in auto sales.
The parts supplier, which had $400 million in liquidity atthe end of 2008, also said it is in compliance with its debtcovenants and is on track to return to profitability in 2009but gave no detailed financial guidance.
'There are too many material uncertainties surrounding theeconomy and our industry,' Chief Financial officer Mike Simontetold analysts and reporters on a conference call.
'We don't know what is going to happen, we are not going tospeculate on the outcomes, what we can say is we understand therisks we face,' Simonte said.
American Axle, which relies on General Motors Corp (GM.N)for about three-quarters of its sales, was hurt by the No.1U.S. automaker's steep production cuts in 2008 as auto salesfell to their lowest level in decades.
The net loss came to $112.1 million, or $2.17 per share, inthe fourth quarter, compared with a year-earlier loss of $26.8million, or 52 cents per share.
Sales fell 33 percent to $503.0 million.
American Axle's quarterly results were also hit by $69.5million in noncash charges related to deferred tax assets.
Excluding one-time items, American Axle posted a loss of 96cents per share. On that basis, analysts surveyed by ReutersEstimates had forecast a loss of 69 cents per share.
Barclays Capital analyst Brian Johnson said American Axle'scurrent liquidity of $400 million is adequate for its'immediate needs.'