Exide eyes turnaround in tough auto battery mart
Nov 30, 2009 | 11:41 AM
| Tatyana Shumsky
Higher lead prices, lackluster demand from automakers and changing consumer behavior are a recipe for a tough auto battery market, but Exide Technologies is quietly staging a steady turnaround.
Exide reported adjusted net income of $3.8 million for its fiscal second quarter ended Sept. 30, a sharp improvement from an adjusted net loss of $11 million in the first three months of its fiscal year but down 80 percent from net income of $19.1 million a year earlier. Sales in the latest quarter totaled $631.8 million, down 31 percent from $914.2 million in the same period last year on 23-percent-lower unit volumes. However, the company's gross margin increased to 20.6 percent in its fiscal second quarter from 17.7 percent a year earlier.
The economic decline delivered some upside for the replacement auto battery segment. As people focus on saving money, many are deciding to keep their old vehicles longer. This means more batteries are sold on the replacement market—great news for Exide, which relies on the auto segment for 55 percent of its battery business. The replacement market accounts for slightly more than 90 percent of its auto battery business.....
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