March 4, 2010 / 9:40 PM / in 8 years

UPDATE 1-Linamar swings to profit in fourth quarter

* Q4 EPS C$0.22 vs year earlier share loss C$0.04

* Excluding items, EPS C$0.17

* Analysts had expected EPS of C$0.11, excluding items

* Revenue down 5.2 percent at C$451.9 million

TORONTO, March 4 (Reuters) - Auto-parts maker Linamar Corp (LNR.TO) said on Thursday it returned to profit in the latest quarter on a pickup in global auto sales and ongoing reductions in overhead and fixed costs.

Linamar, which makes precision components for engines and transmissions, reported earnings of C$14.6 million ($14.2 million), or 22 Canadian cents a share, for the fourth quarter. That compares to a loss of C$2.6 million, or 4 Canadian cents, a year earlier.

It was the first time the company has reported a net profit since the third quarter of 2008.

Stripping out unusual items related to restructuring, impairment charges and other writedowns, the company said it earned C$10.7 million, or 17 Canadian cents a share.

Analysts had expected, on average, a profit of 11 Canadian cents a share, excluding items, on revenue of C$474.4 million, according to Thomson Reuters I/B/E/S.

Sales in the quarter at the Guelph, Ontario-based company were down 5.2 percent from a year earlier at C$451.9 million.

“Q4 ends a very challenging year for Linamar and the industries in which we operate,” Linda Hasenfratz, the company’s chief executive, said in a statement.

“But we have ended it on a very positive note with a strong fourth quarter and another excellent quarter of cash generation,” she said. “This allows us to enter the new year with a strong balance sheet, poised to take advantage of opportunities as they arise.”

The company said it generated C$40.2 million in free cash flow in the quarter. At Dec. 31, it had C$263.1 million available in its syndicated revolving credit facility, up C$55.7 million at Sept. 30.

Linamar reported its results after market close. Its shares ended the day down 29 Canadian cents, or 1.6 percent, at C$17.21 on the Toronto Stock Exchange.

Last March, the stock slumped to as low as C$2.00 as investors worried about the survival of General Motors Co [GM.UL] and Chrysler, two of Linamar’s big customers. ($1=$1.03 Canadian) (Reporting by John McCrank; editing by Peter Galloway)

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