Dana Corporation has revised its first-quarter 2005 earnings outlook down to a range of 11 to 13 US cents per share, from the previously announced 17 to 23 cents.
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Chairman and CEO Michael Burns said the reduction was primarily attributable to higher-than-expected material costs, including the increased cost of steel; a component shortage from a principal supplier that has resulted in reduced shipments of heavy-duty axles; and lower-than-expected North American light-vehicle production rates.
Burns said: “We are hopeful that we will see less pressure on material price increases during the balance of the year, but we can’t count on this. We are accelerating our cost-reduction efforts to pull forward savings to offset the potential impact of continued pressure on material costs.
Regarding the component shortage that has reduced heavy-duty axle shipments, we are working closely with the supplier to resolve the situation and are confident that we will see a substantial improvement in the second quarter.
“However, given the uncertain outlook for the light-vehicle industry in general, as well as on commodity prices, we feel it is prudent to lower our 2005 full-year guidance to $1.30 to $1.45 per share, from our previous guidance of $1.40 to $1.62 per share.”
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