Automotive and truck component supplier ArvinMeritor returned to profitability in its first fiscal quarter of 2003, reporting $32 million in net income on revenues of $1.7 billion. Sales rose 9% or $143 million in the first fiscal quarter of 2003 compared to the same period in 2002, when the Troy, MI-based company posted a loss of $31 million.
Chairman & CEO Larry Yost said ArvinMeritor's sales in its first fiscal quarter received a boost from the "carryover" effect of the emissions standards change last October 1 for Class 8 truck engines built in North America.
Overall, the company's Commercial Vehicle Systems' (CVS) sales increased 18% to $572 million in the first fiscal quarter compared to the same period in 2002. Rising North American Class 8 truck production was the major factor behind the sales increase, said Yost, with those higher sales levels and cost-reduction actions driving the company's operating margin up to 4.2%.
Light Vehicle Systems (LVS) sales jumped 7% to $903 million, though operating margins declined to 4.7% compared to 5.2% from the first fiscal quarter of 2002. Higher steel prices, as well as premium freight and other costs associated with steel shortages, negatively impacted those margins, said Yost.
For 2003, ArvinMeritor predicts light vehicle production will top 16-million vehicles in North America and 16.5-million vehicles in Western Europe, with North American Class 8 truck production totaling 161,000 units. The company expects its sales to reach $7.8 billion in fiscal 2003, compared to $7.1 billion in fiscal 2002.