ARB on slippery slope

ARB tumbled the most in four years after it issued a profit warning due to a drop off in demand from auto manufacturers and rising costs.

Shareholders got off-roaded by ARB Corporation’s (ARB) profit waring this morning, which caused the stock to suffer its worst slide in four years.

The four-wheel drive accessory supplier said that first quarter sales were disappointing due to a sharp drop off in demand from auto manufacturers and rising costs.

The stock tumbled close to 9% on the news that the latest quarter sales were only up 1% over the same time last year while quarterly profits is expected to fall by as much as 10%.

The cut back in expenditure by mining companies in the wake of the uncertain operating environment is having a big impact on sales of four-wheel drive vehicles, but management is trying to offset this by pursuing export opportunities.

ARB declined to give a guidance as it said “uncertainty regarding future exchange rates is making forecasting demand in all markets difficult at present”.

ARB is part of the Uncapped 100. The stock was last trading down 8 cents, or 6.6%, at $11.39.

InvestSMART FORUM: Come and meet the team

We're loading up the van and going on tour from April to June, with events on the NSW central & north coast, the QLD mid-north coast and in Perth, Adelaide, Melbourne, Sydney and Canberra. Come and meet the team and take home simple strategies that you can use to build an investment portfolio to weather any storm. Book your spot here.

Want access to our latest research and new buy ideas?

Start a free 15 day trial and gain access to our research, recommendations and market-beating model portfolios.

Sign up for free

Related Articles