Dana, Libbey post mixed bag of second quarter profits

7/26/2012

Two of the area’s best-known companies posted a mixed bag of second quarter results today with auto parts manufacturer Dana Holding Corp. announcing strong earnings while tableware maker Libbey Inc., sliding to a loss.

Dana reported earnings of $86 million, or 40 cents a share, up 26 percent from $68 million, or 32 cents a share, in the second quarter of last year. Sales were virtually unchanged from last year at $1.95 billion.

Meanwhile, Toledo tableware maker Libbey Inc. reported a second quarter loss of $10.1 million, or 49 cents a share, due primarily to lower sales in its Mexico and European regions. Overall, the company said its sales decreased 2.2 percent to $209.2 million in the quarter, compared to $214 million for the same period in 2011.

While Dana had a solid second quarter, the Maumee-based company did pull back somewhat on its full-year projections based on softening of demand in some markets.

“We delivered strong earnings and margin growth in the second quarter despite the impact of currency and soft commercial-vehicle volumes in Brazil,” company President and Chief Executive Officer Roger Wood said in a statement. “These strong results reflect our ongoing focus on lean operations, as well as our ability to react quickly to changing market conditions.”

However, the company tempered expectations for the full year, saying it expected sales to be flat compared to 2011. Dana reported sales of $7.6 billion last year.

Going into 2012, executives were projecting a 5 percent growth in sales. At the end of the first quarter, they had scaled that back to a 3 percent growth projection.

The company said today that it now expects 2012 sales of $7.5 billion to $7.6 billion and earnings per share were reduced from a range of $1.95 to $2.05 to a range of $1.94 to $2.01.

The company also cut its capital spending projection to $210 million to $230 million from previous projections of $225 million to $250 million.

The company’s stock was up nearly 12 percent in midday trading on the New York Stock Exchange.

Dana also announced it would pay a 5 cent per share dividend on Aug. 31 to shareholders of record as of Aug. 10.

“Strong second-quarter results supported our position of financial strength and that, in turn, allows us to provide a greater return to our shareholders while continuing to invest in our growth and technology initiatives,” Mr. Wood said.

A year ago, Libbey posted a solid second quarter profit of $15.4 million, or 74 cents a share. But Stephanie Streeter, the company’s chief executive officer, said during the quarter its sales in the Mexico region dipped 12.9 percent, while those in Europe fell 16 percent.

On the bright side, Libbey’s sales in China grew 24.2 percent, and they rose 5.9 percent in the U.S. and Canada region. However, the company was hurt additionally by a special $31 million loss incurred by the redemption of debt in conjunction with a new senior note offering completed in the second quarter.

The company’s stock was up 4 percent at midday on the New York Stock Exchange.

“We are encouraged by these results, driven by our efforts to increase productivity and control costs as well as the solid sales growth we achieved in select markets,” Ms. Streeter said in a statement. “Our sales were particularly strong in glass operations in the U.S. and Canada and in China. On the other hand, sales were disappointing in Mexico and Europe.

“Despite this reasonably strong quarter, we have a lot of work to do to sustain performance and secure our future,” the CEO said.

“The strategic plan we announced earlier this month will strengthen and build upon the effort to improve our cost structure, leverage our advantaged businesses, and strengthen our balance sheet,” she added.

On July 18, the company announced it was changing its business strategy to one based on regional leadership, instead of global leadership. In the process, Libbey cut 5 percent of its global managerial, professional, and administrative work force.