Analysts Cut ATC Tech After Honda Drops Contract

NEW YORK (AP) — Two analysts cut their ratings for ATC Technology Corp. Friday after the vehicle remanufacturing and logistics company withdrew its full-year forecast following Honda's decision to drop its automatic transmissions remanufacturing service.

Downers Grove, Ill.-based ATC said it received word from Honda late Thursday that the automaker planned to take its transmissions work in house as soon as the end of the year.

ATC said the business from Honda made up about $52 million of its 2008 revenue of $536 million.

Efraim Levy of Standard & Poor's Equity Research lowered ATC to "Hold" from "Buy" due to concern about Honda's lost business. The analyst predicted ATC would see its annual earnings per share drop by approximately 12 cents starting in 2010 due to Honda's decision.

Five analysts surveyed by Thomson Reuters forecast, on average, a 2010 profit of $2.14 per share for ATC Technology.

Levy also slashed ATC's price target to $18 from $24.

President and Chief Executive Todd R. Peters said ATC understood that Honda — a customer since 2002 — made the decision due to softening demand for remanufactured transmissions.