DETROIT -- American Axle & Manufacturing Holdings Inc. said its first-quarter net income fell 53 percent because of customer downtime for two of its largest programs and lower light-vehicle production in North America, Europe and China.
The driveline supplier reported first-quarter net income of $41.6 million compared with $89.4 million in the year-earlier period.
Revenue for the quarter fell 7.5 percent to $1.72 billion. The supplier reported a $3 million income tax benefit compared with a tax expense of $17.9 million in the first quarter of 2018.
Adjusted earnings during the quarter fell 23 percent to $245 million.
The Detroit supplier said its decrease in year-over-year revenue reflected lower global production. The company said two customers posted downtime from program changeovers -- General Motors for SUVs and Fiat Chrysler Automobiles for Ram heavy-duty trucks.
"We were also impacted by slower-than-expected customer launch ramp curves from the Ram heavy-duty program and certain transmission and engine component launches," CEO David Dauch said. "The impact of these decreases were partially offset by the realization of our new business backlog."
American Axle shares have been down since the first-quarter report was issued on Friday. On Monday, shares fell 2.9 percent to $13.21 in afternoon trading.
The supplier's 2019 full-year targets are unchanged.
First-quarter driveline sales fell 6.7 percent to $1.13 billion and adjusted earnings fell 28 percent to $137.2 million. Dauch said year-over-year profit margins were down because of lower sales, higher launch costs and higher manufacturing costs because of inflationary pressures on such items as materials, freight and tariffs.
"On the supplier side of the business, we have nearly resolved all the issues that were previously impacting us," he said. "We have one issue that is continuing to cause us excessive premium costs in order to meet our customer's requirements. This open issue relates to an aluminum casting supplier for our e-drive [hybrid and electric motor] units and we continue to work on it in order to meet quality and on-time delivery requirements."
He added: "While we continue to make progress, we see this issue carrying into the second quarter of 2019."
AAM's metal forming segment recorded first-quarter sales of $483.3 million, down 11 percent from a year earlier, and adjusted earnings of $85.3 million, down 19 percent.
First-quarter sales for the casting unit fell 5.7 percent to $225.3 million, while adjusted earnings increased 4.2 percent to $22.5 million.
American Axle & Manufacturing Holdings ranks No. 40 on Automotive News' list of the top 100 global automotive parts suppliers, with $6.27 billion in sales to automakers in 2017.
