SUPERIOR'S PROFITS FALL VALLEY WHEEL, PARTS MANUFACTURER TIGHTENS BELT.Byline: Gregory J. Wilcox Staff Writer VAN NUYS - Superior Industries International Inc. on Wednesday reported a 39 percent drop in second quarter profits that was fueled in part by weakness in the vehicle manufacturing sector and high energy prices. The Van Nuys-based aluminum wheel and suspension parts maker said that second quarter net income totaled $13.4 million, or 51 cents a share, on sales of $161.9 million. The results matched the consensus of nine analysts polled by Thomson Financial/First Call. In the year-ago quarter Superior earned $21.9 million, 83 cents, on sales of $175.8 million. Unit shipments fell 7 percent, reflecting generally soft demand for light vehicles, the company said. In response, Superior said that it implemented a cost-cutting program but that no layoffs are planned at the Van Nuys manufacturing facility. However, about 75 workers were laid off at a plant in Arkansas, said R. Jeffrey Ornstein, the company's chief financial officer. Also, the Van Nuys plant was shut down for two weeks this summer and workers paid their vacation wages. ``We haven't done that for a while,'' he said. Superior is also cutting back on overtime to reduce costs. High energy prices, primarily natural gas, reduced gross margin by approximately $2.2 million, or 6 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. . The energy situation stripped 10 cents from the per share earnings in the first quarter. The company has about 50 furnaces in Van Nuys alone that operate at 1,300 degrees Fahrenheit as part of the wheel manufacturing process. ``We're looking at ways we use energy. Does a furnace need to be on 24 hours or can you cut back to where you can keep the metal hot?'' Ornstein said. Second quarter results also included the write-off of approximately $2.5 million, or 6 cents per share, of nonrecurring start-up costs related to Superior's new aluminum automotive components business and wheel facility in Chihuahua, Mexico. The factory is scheduled to begin shipments in the second half of this year. Superior will soon complete is global expansion program and is aggressively seeking to expand market share. ``We're growing faster than the market so we are obviously taking business away from our competitors,'' Ornstein said. Shipments for several programs are scheduled to begin in the second half of the year, including wheels for the new Dodge Ram
The Ram is a full-size pickup truck from Chrysler LLC's Dodge brand. The name was first used in 1981 on the redesigned Ram and Power Ram, though it came from the hood ornament used on , Chevrolet Avalanche The Chevrolet Avalanche is Chevrolet's sport utility truck. It is a four-door, six-seat pickup truck with a somewhat SUV-like flavor, known as a "sport utility truck". Avalanche is based on the full-size long-wheelbase General Motors SUVs (such as the Chevrolet Suburban), and , Ford Thunderbird The Ford Thunderbird was a car manufactured in the United States by the Ford Motor Company. It entered production for the 1955 Ford Thunderbird model year as a two-seater sporty car but, unlike the similar Chevrolet Corvette, the Thunderbird was never sold as a full-blown sports , Toyota Camry The Toyota Camry is a mid-size sedan assembled by Toyota in Georgetown, Kentucky; Altona, Victoria, Guangzhou, China and the original factory in Toyota City, Japan. In some markets, the top range Camry models are seen as executive cars. and Buick Rendezvous The Buick Rendezvous, introduced in the spring of 2001 as a 2002 model year vehicle, is a sport utility vehicle sold by the Buick division of General Motors. Background models. The first production shipments of Superior's aluminum suspension components are also set to begin in the third quarter. Superior supplies aluminum wheels and other aluminum automotive components to Ford, General Motors, DaimlerChrysler, BMW BMW in full Bayerische Motoren Werke AG German automaker. Founded as an aircraft engine manufacturer in 1916, the company assumed the name Bayerische Motoren Werke and became known for its high-speed motorcycles in the 1920s. , Volkswagen, Audi, Land Rover See LANRover. , MG Rover, Toyota, Mazda, Mitsubishi, Nissan and Isuzu. Analyst Joseph Phillippi at UBS UBS Union Bank of Switzerland UBS United Bible Societies UBS United Blood Services UBS United Buying Service UBS Used Bookstore UBS University Business Services UBS Universal Building Society (UK) UBS Ulaanbaatar Broadcasting System Warburg said the challenge for Superior will be maintaining its profit margins since vehicle manufacturers are always lobbying for lower unit prices. |
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion