WARREN, Ohio -- Stoneridge Inc. Thursday reported first-quarter net income of $1.5 million, or 5 cents per diluted share. This compares with net income of $4.1 million, or 15 cents per diluted share, the same quarter a year ago.
The decrease in net income was attributed to lower sales by the company's PST business segment across all of its product lines sold in Brazil and a $1.6 million unfavorable currency loss in Brazil, which was caused by a devaluation of the Argentine peso compared with the Brazilian real, most of which occurred in January.
"As a result of PST's performance during the first quarter and continued expected economic weakness, our management team has been executing an aggressive cost-reduction program to reduce headcount, lower selling and administrative expenses, reduce overhead costs and source components from Asia directly from design houses to lower raw material costs,” the company said. “We expect sales and earnings in our electronics and xontrol devices segments will continue to be stable platforms for future growth, and we expect a continued recovery in the wiring business performance."
First-quarter net sales were $236.4 million, an increase of 0.3% compared to first-quarter 2013 sales. The increase in net sales for the quarter ended March 31 was primarily the result of increased sales to European commercial vehicle customers in the company's electronics business segment and increased sales to North American automotive customers in the company's control-devices segment.
That segment recorded an increase in sales of $5.4 million, or 7.5%, and the electronics segment recorded a $5.6 million, or 12.6%, increase compared with the first quarter of 2013. The increases reflect continued strength in these markets, Stoneridge said. These increases were offset by lower sales in Brazil and Argentina from the PST business segment, which experienced a decrease of $8.5 million, or 20.1%, compared with the first quarter of 2013, of which $6.3 million of the reduction resulting from the devaluation of the Brazilian real compared to the U.S. dollar. During the first quarter, the Brazilian real lost 18% of its value against the U.S. dollar compared with the first quarter of 2013.
"Our electronics and control-devices segments continued to perform well, and wiring has begun to stabilize," noted John Corey, president and CEO, in a prepared statement. "However, PST's sales were lower as the Brazilian economy has not improved and currency impacts were negative, both of which affected the sales mostly in our audio and aftermarket products.
At March 31, Stoneridge's consolidated cash position was $48.4 million, a decrease of $14.4 million from Dec. 31. The change in the cash balance was attributed to seasonal increases to trade working capital.
Stoneridge Inc. is an independent designer and manufacturer of highly engineered electrical and electronic components, modules and systems principally for the commercial vehicle, automotive and agricultural, motorcycle and off-highway vehicle markets.
Published by The Business Journal, Youngstown, Ohio.
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