Driveline specialist Dana Holding said sales for the third quarter of 2012 fell 12% year on year to $1.7bn with a currency-related hit accounting for $120m as “softening” North America demand affected commercial vehicle customers and “continued weakness” in South America further hit year on year sales comparisons by around $95m.
Net income dived to $56m from $110m in Q3 2011 but that included a $60m gain from investment sales.
Year to date net income was, however, $212m compared with $148m in the first nine months of 2011 including the impact of a $53m charge for debt extinguishment related to refinancing activities completed early that year.
Dana booked adjusted EBITDA of $190m in the quarter, or 11% of sales, compared with 10.2% in Q3 2011. Adjusted earnings per share (EPS) were $0.37, compared with $0.45. In addition to lower earnings in the current quarter, 2012 EPS was also impacted by higher tax expenses.
“We are pleased to report solid financial results for the third quarter, despite choppy demand patterns and rapid softening in certain of our end markets, notably North America Class 8 commercial vehicle production,” said president and CEO Roger Wood. “Dana has continued to respond quickly to changing market conditions with disciplined cost and investment actions, generating positive cash flow and improving adjusted EBITDA margin over this time last year.
Sales for the first nine months of the year were $34m lower year on year at $5.6bn. Adjusted EBITDA was $627m, or 11.1% of sales, a 90 basis point improvement over a year ago.
The supplier revised down its full year sales and profit expectations, reflecting further forecast reductions in commercial vehicle production in North America as well as softening construction demand in Europe.
Adjusted EBITDA as a percentage of sales remained unchanged.
Dans now expects sales of $7.2bn to $7.3bn compared with previous guidance of $7.5bn to $7.6bn; adjusted EBITDA of $780m to $800m ($820m to $840m); and adjusted EPS of $1.75 to $1.82 per share ($1.94 to $2.01).