* Q2 adj. EPS 69 cents vs Street view 44 cents
* Raises full-year sales and earnings outlook
* On track to close Detroit plant in February
* Shares up more than 10 percent
(Adds details on Detroit plant closure, New York plant labor
negotiations, CFO comment and Tenneco results)
By Clare Baldwin
DETROIT, July 29 American Axle and
Manufacturing Holdings Inc (AXL.N) posted higher-than-expected
quarterly earnings and raised its full-year forecast due to
increased demand from its automaker customers, sending its
shares up more than 10 percent.
The company, the latest auto parts maker to beat Wall
Street forecasts, said it was benefiting from increased
production by automakers and improvements in capacity
utilization and fixed costs.
American Axle, which makes axles and other driveline
components for trucks and larger vehicles, also said it expects
demand for full-size pickups and SUVs to revive.
It now expects full-year sales of $2.5 billion to $2.6
billion, up from a previous forecast of $2.4 billion to $2.5
It said full-year adjusted earnings before interest, taxes,
depreciation and amortization would amount to 14.5 percent to
15 percent of sales.
American Axle reiterated its plans to close a factory in
Detroit and said labor negotiations at the Cheektowaga plant
near Buffalo, New York, should be resolved in the "very near
The Cheektowaga plant may also be closed as soon as next
February if a labor agreement cannot be reached, Chief
Financial Officer Michael Simonte said in an interview.
"We need to have a market cost-competitive cost structure,
including of course labor costs, in order for that facility to
have a sustainable future," Simonte said.
He said the company was using its plants in Michigan and
Ohio, where workers are represented by the United Auto Workers
union, as well as competitors' plants as a guideline for what
it hopes to achieve.
American Axle said previously that it would shutter the
Detroit plant after the current labor contract expires next
Executives told analysts on Friday the company expects to
save $10 million to $20 million per year on the Detroit and
Cheektowaga plants, with most of the savings coming from the
closure of the Detroit facility. [ID:nN1E760155]
American Axle shares were up $1.07 to $11.61 in afternoon
trading on the New York Stock Exchange.
AUTO INDUSTRY RECOVERY
The U.S. auto industry is in the early stages of a
recovery. Macroeconomic uncertainty and higher gasoline prices
have caused at least some consumers to put off buying a new
Automakers are due to report U.S. July auto sales on Aug.
2. While August sales are expected to show an improvement over
the past two months, it could be some time before the industry
is fully back on track. [ID:nN1E76K2AN]
American Axle said net income in the second quarter rose to
$49.2 million, or 65 cents per share, from $25.4 million, or 34
cents per share, in the year-earlier period.
Excluding debt refinancing and redemption costs, earnings
were 69 cents per share, well ahead of analysts' average
forecast of 44 cents, according to Thomson Reuters I/B/E/S.
Sales rose 23 percent to $686.2 million.
Emissions control and ride control systems maker Tenneco
Inc (TEN.N) also beat analysts' earnings expectations on
Friday. [ID:nN1E76R1S9] U.S.-based auto suppliers BorgWarner
Inc (BWA.N), Federal-Mogul Corp FDML.O and Goodyear Tire &
Rubber GT.N did the same on Thursday. [ID:nN1E76R0ED]
(Reporting by Clare Baldwin, additional reporting by Bernie
Woodall and Ben Klayman; Editing by Steve Orlofsky and John