ArvinMeritor Inc. (ARM) has revealed that it will sell the remaining part of its Light Vehicle Systems (LVS) business by the end of 2010. The company’s LVS segment includes the Body Systems business, which supplies roof and door systems for passenger cars to original equipment manufacturers (OEMs), and the remaining Chassis businesses. After its divestment, the company will be able to focus on its commercial vehicles business.
ArvinMeritor’s commercial vehicle business is divided into three segments — Commercial Trucks, which supplies drivetrain systems and components for medium- and heavy-duty trucks; Industrial, which supplies drivetrain systems for off-highway, military, construction, bus and coach, fire and emergency and other industrial applications; and Aftermarket & Trailer, which supplies axle, brakes, drivelines, suspension parts and other replacement and remanufactured parts to commercial vehicle aftermarket customers.
ArvinMeritor has for some time been shedding its LVS business, which is exposed to cyclical aberrations in the auto industry. In fiscal 2009, the company completed the sale of its stake of 51% in Gabriel de Venezuela, and the stake of 57% in the U.K.-based joint venture Meritor Suspension Systems, with Mitsubishi Steel Manufacturing Company.
The company also sold both the Wheels business and Gabriel Ride Control Products in North America, thus reducing the overall LVS business to 25% of total sales as of fiscal 2009.
ArvinMeritor Inc. has shown break-even results for the first quarter of its fiscal 2010 ended December 31, 2009, after reporting losses throughout its previous fiscal year. This was better than the Zacks Consensus Estimate of 8 cents per share.
The result also improved from a loss of $47 million or 65 cents per share in the first quarter of fiscal 2009, driven by growth in the company’s global markets and benefits from cost reductions executed earlier. Sales from continuing operations increased 6% to $1.1 billion during the quarter.
Sales in the Commercial Trucks segment declined 27% to $433 million, Industrial rose 8% to $226 million, Aftermarket & Trailer fell 13% to $222 million and LVS shot up 32% to $346 million. EBITDA before special items stood at $56 million compared to $16 million in the same period last year.
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