Shares of American Axle & Manufacturing Holdings Inc. (AXL) slipped about five percent on Friday after reporting a first-quarter profit that fell short of estimates. Profit for the quarter, however, increased from last year, helped by special gain, higher gross margins and double-digit sales growth.
First-quarter gross margin, the percentage of sales left after deducting production costs, advanced to 18.5 percent from 17.9 percent last year.
The company's non-GM sales grew 8.5 percent year-over-year to $193.6 million. American Axle generates more than 75 percent of its revenue from sales to GM. However, the company is determined to increase its non-GM sales to 50 percent of total sales by 2015.
American Axle, which makes axles, chassis modules, driveshafts, power transfer units, said sales for the first quarter grew 16.4 percent to $751.5 million from $645.6 million in the prior year. Wall Street analysts on a consensus estimated revenues of $773.09 million for the quarter.
The company's first-quarter net earnings improved to $51.2 million or $0.68 per share from $37.7 million or $0.50 per share last year.
The recent first quarter results include post-retirement benefit curtailment gains of $21.8 million or $0.29 per share, which was partially offset by special charges and restructuring costs of $16.5 million or $0.22 per share related to the closure of two manufacturing facilities.
On average, ten analysts polled by Thomson Reuters expected earnings of $0.65 per share for the quarter. Analysts' estimates typically exclude special items.
Chief Executive Richard Dauch said, "AAM achieved solid financial results in the first quarter of 2012, with strong sales growth driving higher earnings. These results reflect the favorable impact of increased production volumes across many of our major product programs and sustained improvements in capacity utilization."
AXL is currently trading on the NYSE at $10.15, down $0.51 or 4.74%, on a volume of 2.3 million shares, above the three-month average volume of 1.6 million.
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