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February 10, 2010
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ATC Technology Corp. (ATAC) has posted flat earnings of 50 cents per share (before special items) for the fourth quarter of 2009, compared to the year ago level. This was a tad lower than the Zacks Consensus Estimate of 52 cents per share. Consolidated revenue in the quarter was almost flat at $125.3 million, compared to $126.5 million in the fourth quarter of 2008.
Revenue in the Logistics segment rose 6.4% to $93.4 million. However, the segment profit increased 15% to $17.6 million driven by a 37.6% increase in revenue with TomTom and volume associated with a new test and repair program, partially offset by an 8.3% decrease in revenue with AT&T (T) due to returned volumes related to mobile device.
Revenue in the Drivetrain segment dipped 17.4% to $31.9 million. The segment loss narrowed down to $1.8 million, compared to a segment loss of $88.4 million for the fourth quarter of 2008. The loss was driven by the wind-down of the ATC's transmission remanufacturing program for Honda Motor (HMC) and the slower than anticipated launch of the company's engine programs and associated start-up costs, and included $300,000 of restructuring charges.
Annual Results
In 2009, ATC posted a profit of $2.15 per share, compared to $1.91 per share in the prior year. The profit was slightly lower than the Zacks Consensus Estimate of $2.17 per share. Consolidated revenues fell 8.6% to $485 million during the year.
Revenue in the Logistics segment slid 2.3% to $345.3 million. The segment recorded a 13.9% improvement in profit to $64 million, driven by the launch of new programs with both new and existing customers, beside the benefit of cost reduction initiatives.
Revenue in the Drivetrain segment ebbed 21.1% to $139.7 million. The segment loss was $37 million versus a loss of $81.3 million in 2008. The loss was attributable to overall softness in the industry, the previously announced wind-down of transmission remanufacturing program with Honda and the slower than anticipated launch of the engine programs and associated start-up costs.
ATC ended the year with $73.8 million in cash, zero debt and $148.7 million of availability on its credit facility. For 2010, the company expects to generate revenue of $515 million - $550 million, a 6% - 13% increase $485 million in 2009. Earnings per diluted share are expected in the range of $2.13 - $2.45. This is compatible with the Zacks Consensus Estimate of $2.25 per share.
Revenue in the Logistics segment is expected in the range of $400 million - $430 million with a segment profit of $67 million - $74 million. Meanwhile, revenue in the Drivetrain segment is anticipated in the range of $115 million - $120 million with a segment profit of $2 million - $5 million.
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