TORONTO — Martinrea International Inc. beat expectations even though its net profit plunged 35 per cent in the first quarter as it continued to face cost inflation, new product launches and production disruptions.
The Toronto-based auto parts manufacturer says it earned $25.2 million or 31 cents per diluted share, compared with $38.7 million or 48 cents per share a year earlier.
Excluding one-time items, adjusted net earnings were $24.8 million or 31 cents per share, down 24 per cent from $32.6 million or 41 cents per share in the first quarter of 2021.
Revenues for the three months ended March 31 increased about 16 per cent to $1.16 billion from $997.2 million led by North American sales rising 22 per cent to $859.7 million.
Martinrea was expected to report 11 cents per share in adjusted earnings on $997.3 million of revenues, according to financial data firm Refinitiv.
The company says the results were better than the third and fourth quarters because of a lower level of semiconductor-related production shutdowns and customer call-offs during the quarter, including the Chevrolet Equinox and Sierra and Silverado pickup truck platforms.
“We continue to experience production disruptions with some customers, as well as persistent inflationary cost pressures, with rising energy prices in Europe being the most pervasive,” stated CEO Pat D’Eramo in a news release.
The company is also experiencing the most new business launch activity in its history.
“These factors continue to keep margins below their long-run potential — based on history, and on what we believe our operations can achieve. The good news is, we are off to a good start in 2022 as our first quarter performance demonstrates.”
This report by The Canadian Press was first published May 5, 2022.
Companies in this story: (TSX:MRE)
