Martinrea Q2 profit down from year ago but up from Q1; revenue hits record high

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TORONTO – Martinrea International Inc. (TSX:MRE) has reported $23.3 million of net income in the second quarter, a 15 per cent decline from a year earlier but an improvement from the previous quarter.

The profit for the three months ended June 30 amounted to 27 cents per diluted share under standard accounting and 28 cents per share on an adjusted basis, below estimates on both counts.

However, the Toronto-area autoparts manufacturer’s revenue was well above estimates, rising 12.7 per cent from a year before to a company record $930.9 million from $826.3 million in the second quarter of 2013.

Analysts had estimated 32 cents per share of net income, 30 cents per share of adjusted net income and $897.7 million of revenue, according to data compiled by Thomson Reuters.

Martinrea says that, excluding low-margin tooling revenue, its revenues were about $870 million — in line with company’s estimates. Tooling revenues were $61.2 million, up $16.7 million from $44.5 million in the second quarter of 2013.

In the previous quarter ended March 31, Martinrea had $864.5 million of revenue, $26.6 million of net income and $17.6 million of adjusted earnings, or 21 cents per share on an adjusted basis.

Martinrea’s adjusted profit has excluded the costs of external legal and forensic costs related to litigation between the company and Nat Rea, a co-founder and former executive of the company.

Its net earnings were negatively affected by the cost of new programs for Ford and Chrysler, lower margins as a result of operational inefficiencies at one of its plants and higher expenses for administration, R&D and financing.

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