November 10, 2009 / 10:50 PM / 9 years ago

UPDATE 1-Martinrea ekes out profit, sees volumes improving

* Q3 earnings of C$0.01/shr vs C$0.06/shr year ago

* EPS C$0.04 ex-items vs analysts C$0.06

* Revenue down 17.4 percent to C$293.8 million

* Company expects slow, steady growth

TORONTO, Nov 10 (Reuters) - Auto parts maker Martinrea International Inc (MRE.TO) reported a smaller quarterly profit on Tuesday due to lower volumes, but said its most difficult days were behind it and that production levels in the auto sector had begun to pick up.

The company posted a profit of C$717,000 ($683,000), or 1 Canadian cent a share, for the period ended Sept. 30. That compares with a profit of C$4.2 million, or 6 Canadian cents a share, a year earlier.

Adjusted to exclude one-time items, the company said it earned 4 Canadian cents a share.

Sales at Toronto-based Martinrea were down 17.4 percent at C$293.8 million.

Analysts, on average, expected a profit of 6 Canadian cents a share, excluding items, on revenue of C$321.3 million, according to Thomson Reuters I/B/E/S.

The downturn in the automotive sector pushed Martinrea to three straight quarterly losses as two of its main customers, General Motors Co [GM.UL] and Chrysler, nearly collapsed and automakers slashed production to adjust to the drop in demand.

“We have come through the most difficult period in the North American automotive industry that I can remember, but things are improving,” Fred Jaekel, Martinrea’s chief executive, said in a statement.

Production “numbers in our third quarter increased from the two previous quarters, and that has resulted in a return to profitability for our company,” he said.

Jaekel added that July was a very slow month for the company, as Chrysler had just exited bankruptcy, while GM emerged from bankruptcy protection at the beginning of August.

“The production volumes for the industry as a whole are still, I believe, lower than the long-term replacement rate for vehicles in North America, and we will continue to see some improvement in volumes over time,” he said.

“The rate of increase may be slow, but I think it will show a steady growth.”

Martinrea, which has operations in Canada, the United States, Mexico and Europe, reported its results after market close. Its shares ended the day up 1 Canadian cent at C$8.26 on the Toronto Stock Exchange. The shares have risen more than two and a half times in value since the beginning of the year.

$1=$1.05 Canadian Reporting by John McCrank; editing by Rob Wilson

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