Dana Corporation has reported second quarter net income, excluding unusual items, of $US53 million, or 35 cents per share, compared to $18 million, or 12 cents a share, during the first three months of 2005.
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Financial results for Q2 2005, though down on last year, showed significant improvement over Q1 results and included: sales of $2.6 billion up 6%; net new business for the period of $1.3 billion; and higher sales and cost savings for operating profit improvements of 53% in the automotive systems group and 48% in the heavy vehicle technologies and systems group.
Unusual items in the second quarter included a net charge of $5 million related to enactment of new Ohio tax legislation and a $3 million net gain from the sale of certain Dana Credit Corporation (DCC) assets.
Including these, net income totalled $51 million, or 34 cents a share.
“Our lean manufacturing and value engineering programmes are delivering tangible results as evidenced by the substantial profit improvement from last quarter,” said Dana chairman and CEO Mike Burns.
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By GlobalDataThe second quarter of 2004 included net unusual gains of $33 million associated with the sale of DCC assets and a tax benefit that Dana expected to realise on the sale of the automotive aftermarket operations that was completed in November 2004. Reported second-quarter 2004 net income, including net unusual gains, was $110 million, or 73 cents per share.
The heavy vehicle technologies and systems group continued to benefit from the strong commercial and off-highway markets. Its sales grew by 21% in the second quarter compared to the same period last year.
Automotive systems group sales for the second quarter of 2005 were up 10% versus the same period last year.
Heavy vehicle profits were up 19% year on year, while automotive systems profits were down 15%.
Second-quarter profits – particularly those of the automotive systems group – were negatively impacted by approximately $27 million, after tax and net of customer recoveries, in additional steel costs incurred.
2005 profit after tax for the heavy vehicle group was favourably impacted by $4 million related to a decrease in the group’s liability for warranty to reflect lower average claims costs.
First-Half Results
Dana’s six-month consolidated sales for 2005 were $5.1 billion. Income from continuing operations for the first half of 2005, excluding unusual items, was $71 million, or 47 cents per share. Including a net charge of $2 million for unusual items, net income for the six months was $69 million, or 46 cents per share.
In comparison, Dana’s six-month consolidated sales for the first half of 2004 totaled $4.6 billion and income from continuing operations, excluding unusual items, was $109 million, or 72 cents per share. In this period, Dana reported income from discontinued operations of $48 million, or 32 cents per share, representing the automotive aftermarket businesses divested in November 2004.
Earnings expectations for the full year remain unchanged at a range of $1.30 to $1.45 per share.
