American Axle posts 2Q loss

Citing strike effects
July 25, 2008 5:59:31 AM PDT
American Axle & Manufacturing Holdings Inc. said Friday it posted a $644.3 million second-quarter loss, blaming a nearly three-month long strike that crippled production as well as charges related to a new labor agreement. The Detroit-based auto supplier's loss, which amounted to $12.49 per share, compared with a profit of $34.6 million, or 66 cents per share, for the same quarter in 2007.

American Axle said the results included charges of $575.6 million, or $11.16 per share, related to new labor agreements, worker buyouts, plant closures and other moves designed to align the company's production with current and future demand.

Excluding those charges, the loss was still larger than Wall Street expected. Analysts polled by Thomson Financial expected a loss of 98 cents per share for the quarter.

Sales tumbled 47 percent to $490.5 million from $916.5 million in the year-ago period. Analysts, on average, expected $513.8 million in sales for the quarter.

American Axle said the United Auto Workers union strike reduced the quarter's sales by an estimated $274.9 million and operating income by an estimated $86.6 million, or $1.73 per share.

The company said its results also were hurt by a 51 percent drop in North American light truck production.

Record-high gas prices and a resulting consumer shift away from gas-guzzling pickup trucks and sport utility vehicles prompted General Motors Corp., which accounts for the bulk of American Axle's business, and other automakers to slash their production for the quarter.