Modine Q1 results beat Street view, shares up

Modine Manufacturing Co, a maker of heating and cooling systems for vehicles, posted a surprise quarterly profit, helped by strong European, South American and commercial products segments, sending its shares up as much as 22 percent.

But Modine sees a softening in the automotive market in Europe, which accounts for almost half of its net sales.

It also expects the weakness in the North American heavy-duty truck market to continue and cut its volume forecast for the North American truck market by about 10,000 units.

"Fiscal 2009 remains a year of blocking and tackling to attain fiscal 2011 goals of an 18 percent to 20 percent gross margin and 11 percent to 12 percent return on capital employed," the company said in a conference call with analysts.

The company continues to see 2009 pre-tax earnings of $12 million to $16 million on net sales of $1.9 billion to $2 billion. It also sees restructuring charges of about $13 million.

One analyst was expecting revenue of $1.96 billion, according to Reuters Estimates. SURPRISE Q1

For the first quarter ended June 30, net earnings were $7.8 million, or 24 cents a share, compared with $11.0 million, or 34 cents a share, a year ago.

Earnings from continuing operations were $6.8 million or 21 cents a share. Net sales rose 12.5 percent to $499.7 million. Excluding the impact of foreign currency exchange rate changes, sales were up 5.4 percent.

Underperformance in North America and South Korea partially offset growth in other segments. "North America had unacceptable performance driven by operating inefficiencies and underutilization of its facilities amid a slow truck market," the company said.

Two analysts on average were expecting a loss of 6 cents a share, before special items, while one analyst forecast revenue of $482.9 million.

Shares of the Racine, Wisconsin-based company were trading up $2.70 at $16.50 in afternoon trade on the New York Stock Exchange. Earlier they touched a high of $16.83.

Views:0