(RTTNews) - Wednesday, Wabco Holdings Inc. (WBC: News ), a supplier of safety and control systems for commercial vehicles, reported a decline in third quarter earnings as sales declined 42% due to the severe slump in global demand for new commercial vehicles. Wall Street analysts were expecting the company to report a loss for the quarter.

The Brussels, Belgium headquartered company said net income for the quarter plunged to $33.8 million from $63.7 million in the corresponding period last year. Earnings declined to $0.52 per share from $0.97 per share in the same period last year.

Excluding separation and streamlining items, one-time and other tax items, and an adjustment to the one-time impact from the Indian joint venture transactions, performance net income was $12.5 million or $0.19 per share compared with performance net income of $61.3 million or $0.94 per share a year earlier.

On average, five analysts polled by Thomson Reuters expected the company to report a loss of $0.06 per share for the quarter. Analysts' estimates typically exclude special items.

Quarterly sales slid 42% to $382 million from $655 million in the year-ago quarter, but came in above the $321.08 million projected by four Street analysts. Sales declined 38% in local currencies due to the severe slump in global demand for new commercial vehicles.

The company said it is increasing its revenues from emerging markets and as of this quarter two of its five biggest customers are based in Asia.
Operating loss for the quarter was $3 million compared with operating income of $62.2 million a year-earlier. Gross profit fell to $86.8 million from $174.8 million in the year-ago quarter. Gross profit margin was 22.7% compared with 26.7% a year ago. Excluding items, gross margin was 25.7% compared with 27% a year ago.

Net cash from operating activities increased to $31.4 million in net cash flow and $19.7 million of free cash flow. Excluding payments of $10.5 million associated with streamlining, free cash flow in the third quarter totaled $30.2 million.

Year-to-date, net loss amounted to $19.9 million or $0.31 per share compared with net income of $192 million or $2.89 per share in the corresponding period last year. Sales declined to $1.032 billion from $2.133 billion in the same period last year.

Looking ahead, for 2009 the company improved its operating frame work and currently expects sales to decline 37% to 39% in local currencies compared with its earlier forecast of a decline of 35% to 40%. For fiscal 2008, the company reported sales of $2.59 billion. Operating margin is presently expected to be a negative 1.9% or higher including streamlining and separation items compared with a negative 3.2% or better announced earlier.

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