ArvinMeritor, Inc. today reported record sales of $2.3 billion and net income of $41 million, or $0.59 per diluted share, for its second fiscal quarter ended March 31, 2004, compared to the prior year's second-quarter net income of $24 million, or $0.36 per diluted share.
The second quarter included a gain and associated tax benefits of $0.23 per diluted share on the sale of the company's 75% shareholding in AP Amortiguadores, S.A. (APA), a joint venture that manufactures ride control products, and a charge of $0.08 per diluted share, resulting from an agreement with the Environmental Protection Agency to remediate a former Rockwell facility that was sold in 1985.
Sales increased $261 million, up 13%, from the prior year's second quarter. On a constant currency basis, sales would have been up approximately 6%, compared to the second quarter of fiscal year 2003, primarily as a result of stronger North American commercial vehicle truck and trailer volumes.
Operating income for the second quarter of fiscal year 2004 was $81 million, a 29% improvement compared to the same period last year. Operating income in the second quarter of fiscal year 2004 included a pre-tax gain of $20 million on the sale of APA and the environmental remediation costs of $8 million.
Without these items, operating income would have increased 10%, despite higher pension and retiree medical costs, which were $8 million higher than the same quarter in fiscal year 2003, and higher steel costs of $8 million. ArvinMeritor Chairman and Chief Executive Officer Larry Yost said, "We are pleased with the improvement in our second-quarter results. Our sales and earnings benefited from the stronger North American Class 8 truck volumes. The benefit of higher volumes and continued cost-reduction actions allowed us to improve our results."