ArvinMeritor (ARM) Reports a Q1 Loss; Updates Impact from Chrysler Bankruptcy

May 5, 2009 4:41 PM EDT

ArvinMeritor, Inc. (NYSE: ARM) reports Q1 loss of $0.65, 3 cents better than the analyst estimate of ($0.68). Revenue for the quarter was $1.1 billion, versus the consensus of $1.24 billion.

Impact of Chrysler Bankruptcy: As of April 29, ArvinMeritor had $7 million of outstanding receivables subject to Chrysler's U.S. bankruptcy proceedings. Of that amount, only $3 million are expected to be outside of administrative claim status. Management has determined that if some or all of these receivables are ultimately not collectible, the impact on the company's second-quarter results would not be material.

ArvinMeritor will be impacted by Chrysler's announcement to idle its facilities during the bankruptcy process. The company anticipates a 30-60 day shutdown to have a negative impact on EBITDA in the range of $2 million to $5 million.

Outlook: While current market conditions remain depressed, North America and South America are showing signs of stabilization, and certain markets in Asia are indicating slight signs of improvement, offsetting continued declines in Europe.

For the third quarter of fiscal year 2009 (compared to the second fiscal quarter of 2009), the company anticipates:

Revenue to be about flat;
Loss per share, before special items, to be greater;
Free cash flow, before reductions in sales of receivables, to be positive;
Total free cash flow to be slightly negative

Related Categories

Earnings
Guidance

Stocks Mentioned

Related Entities

• Chrysler LLC
• Bankruptcy

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