Economic trouble in Venezuela dragged on Dana Holding Corp.’s profits in the first quarter, even as the auto parts supplier reported stable sales.
Company officials said Friday that devaluation of the Venezuelan bolivar resulted in a one-time charge of $17 million. That lowered Dana’s net income to $34 million, down from $42 million in the first quarter of last year.
The Maumee-based company said it earned an adjudged 32 cents per share, up from 28 cents per share last year.
However, the increase was largely because of Dana’s share repurchase program, which has reduced the number of outstanding shares by 42 million since late 2012.
Analysts had been expecting adjusted earnings of 39 cents per share.
Shares of Dana’s stock pulled back by more than 9 percent on the news Friday, closing down $2.12 per share to $21.13.
In addition to currency issues in Venezuela, vehicle production is at a near standstill in the country and manufacturers are having difficulties getting raw materials such as steel to support production of other components.
Dana is just the latest in a string of U.S. corporations suffering because of instability in Venezuela.
Colgate-Palmolive Co., which also reported its first quarter results on Friday, said its net income took a $174 million hit as it remeasured its Venezuelan balance sheet. Earlier in month the Coca-Cola Co. recorded charges of $247 million related to the devaluation of the bolivar.
Outside of Venezuela, Dana officials said the quarter was solid. Net sales rose about 1 percent to $1.7 billion.
“Operationally the business performed very well,” chief executive officer Roger Wood said on a conference call with investors and analysts.
The company said adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) was $165 million, compared with $158 million last year.
Mr. Wood also said that the company’s work in developing innovative drivetrain technology that saves on fuel is paying off.
“Our visits with customers ... confirm the technology strategy we embarked on a few years ago is spot on to what the market needs,” he said.
Officials are also encouraged by what they see as gaining momentum in commercial trucks in North America, and some early signs that construction markets might be improving.
Though Dana expects continuing currency issues in Venezuela, officials believe vehicle production should resume by the second half of the year. Running with that assumption, Dana believes it can still meet its full-year projected sales of $6.8 billion to $6.9 billion with adjusted earnings of $1.82 to $1.86 per share.
However, officials did say if vehicle production in Venezuela remains idled, Dana could be looking at a risk of losing about $40 million.
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