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Martinrea Q1 profits slumps to $16.7M; revenue sets quarterly record of $864.5M

TORONTO - Martinrea International Inc. (TSX:MRE) has reported a decrease in first-quarter net earnings even as the maker of parts, modules and other products for the automotive industry reported record revenues for the quarter of $864.5 million.

Ontario-based Martinrea reported after markets closed Thursday that net income in the three months ended March 31 fell to $16.7 million or 20 cents per share from $19.9 million or 24 cents per share in the same 2013 period.

Revenue for the three months was up 12.4 per cent from $769.1 million in the same prior-year period, including an increase of $41.8 million or 29.5 per cent to $183.7 million from European operations.

Martinrea blamed the slump in profits on a number of factors, among them new program launch costs, lower margins at some plants, increases in selling, general and administrative expenses as well as a decrease in its foreign exchange gain compared with last year.

These were somewhat offset by productivity and efficiency improvements at certain operating facilities, improved pricing on certain long-term customer contracts and a lower effective tax rate due generally to mix of earnings and the utilization of tax losses.

President and CEO Nick Orlando said the company remains "highly focused on improving our operations everywhere."

"The first-quarter results are tempered somewhat because of launch costs from several launches and the issues we experienced at our Hopkinsville (Ky.) plant late last year which carried over into the first quarter, but we are making progress," he said.

"Many of our plants, whether doing fluids, metallic, aluminum or assembly work, are performing very well financially."

On the Toronto Stock Exchange, Martinrea shares closed down 13 cents at $11.02 on Thursday.

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