The Successful Investor Hotline – Friday, May 8, 2009

Article Excerpt

LINAMAR CORP., $8.24, Toronto symbol LNR, jumped 80% this week after it reported better-than-expected first-quarter results. Linamar sells transmissions and other parts to several carmakers. This business accounts for about 85% of its revenue. The company also makes self-propelled, scissor-type elevating work platforms under the Skyjack name, plus consumer products, such as lawnmowers and cargo trailers. Linamar lost $12.6 million, or $0.19 a share, in the three months ended March 31, 2009. However, this was mainly caused by an $11.7-million writedown of goodwill. As well, slowing demand from carmakers prompted Linamar to cut its workforce by 12%, or 1,300 employees. This resulted in $4.4 million in severance payments. Without these items, the company lost just $0.01 a share. That’s a lot better than the loss of $0.15 a share that analysts were expecting. In the year-earlier quarter, Linamar earned $29.5 million, or $0.43 a share. Its sales fell 30.9%, to $424.9 million from $614.5 million. The company has managed to attract…