(Reuters) - U.S. auto parts supplier American Axle and Manufacturing Holdings Inc (AXL.N) reported disappointing quarterly results on Friday, hurt by restructuring and debt refinancing costs and by higher-than-expected costs from new-product launches.
The company’s shares fell as much as 11.6 percent, their biggest one-day drop in nearly a year.
“Our operating performance was weaker than in previous quarters and I think investors are reacting to that,” Chief Financial Officer Michael Simonte said in an interview.
“In many cases we are launching new products in new facilities for new customers with a new workforce,” Simonte said, adding that the company saw cost increases and supply disruptions that raised the cost of the launches “exceeding anything we’ve had in the recent past.”
Debt refinancing and redemption costs reduced third-quarter results by $10.1 million, or 14 cents per share. Restructuring costs of $3.2 million related to plant closures knocked another 4 cents per share off results, the company said.
American Axle reported a net loss of $8.2 million, or 11 cents per share, compared with a profit of $22.6 million, or 33 cents per share, a year earlier.
Excluding special items, the company earned 7 cents per share, which missed analysts’ expectations of 33 cents per share by a wide margin.
Total revenue rose 8.5 percent to $702.9 million. Analysts had expected revenue of $686.8 million, according to Thomson Reuters I/B/E/S.
“We do expect to make meaningful improvements in operating performance beginning here in the fourth quarter and the first six months of next year,” Simonte said.
American Axle, which relies on General Motors Co (GM.N) for about 70 percent of sales, said non-GM sales in the quarter rose about 14 percent to $198.8 million.
Detroit-based American Axle has been trying to reduce dependence on GM by diversifying its customer base and launching new products. The company set a target in July to reduce its reliance on GM to 50 percent of sales by 2015.
Shares of the company were down 9.3 percent at $10.51 on Friday afternoon, off an earlier low at $10.25.
Reporting by Bijoy Koyitty in Bangalore and Deepa Seetharaman in Detroit; editing by Supriya Kurane and Matthew Lewis