Tuesday, Apr 24, 2018
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Bankrupt firm posts $1.6 billion loss for '05

Toledo's Dana Corp. lost more than $1.6 billion last year as the bankrupt auto supplier took a series of special charges, including $1.2 billion worth in one quarter alone.

Still, even without those charges, Dana failed to make a profit in either the businesses it plans to keep or in those it wants to divest this year as part of a restructuring announced before filing for Chapter 11 reorganization this month.

The company, which released "preliminary" figures yesterday, said it lost $1.63 a share last year before special charges and $10.71 a share including the charges.

For 2004, it had a profit of 41 cents a share. One group of analysts expected the firm to earn a dime a share before special charges.

Dana reported sales of $8.6 billion in business units not up for sale, an increase from the year before. It did not report annual revenues for the three business units it plans to sell, which include northwest Ohio factories with 530 employees in Archbold, Upper Sandusky, and Wharton.

The company's business units supplying axles and other parts to sport-utility vehicles, pickups, commercial trucks, and other vehicles lost $215 million last year, compared with an operating profit of $165 million the year before.

Its operations making engine parts, pumps, and other parts, which it wants to sell, lost $36 million last year, down from an operating profit of $48 million in 2004.

Dana, which filed bankruptcy in New York, made no executives available for comment. And, as most firms in bankruptcy, it did not have a conference call with industry analysts on the financial report.

"If you strip out the special charges, Dana's operating loss underscores the fact the company is not making enough money to meet their obligations," Sean Egan, managing director of Egan-Jones Ratings Co. of Pennsylvania told Bloomberg News Service.

Dana must "make large strides in reducing their operating costs," he said.

Audited figures and more information, including executive compensation, are to be released in the Fortune 500 firm's filing with the U.S. Securities and Exchange Commission before April 30.

Stock in Dana closed down 6 cents a share yesterday at $1.81 in over-the-counter trading.

Experts predict Dana will emerge from bankruptcy with fewer facilities and employees as it works to be more competitive.

As part of its bankruptcy restructuring, the company likely will sell more businesses it deems non-critical, but it eventually could buy businesses to shore up its main product offerings, said Neil De Koker, president of the Original Equipment Suppliers Association in Troy, Mich.

To improve efficiency, the firm may reduce the number of suppliers it uses, he said. Several more parts companies, he added, probably will file for bankruptcy protection in the next year or two.

The U.S. auto industry's push to increase productivity has resulted in an 18 percent improvement since 1998, coupled with the loss of 200,000 automaker and supplier jobs, he said.

In the fourth quarter, Dana lost $376 million, including $230 million from special charges, or $2.50 a share. A year earlier, it lost $136 million, or 91 cents a share, and had $171 million in special charges.

The firm took a $123 million charge late last year related to the planned divestitures of three business. Other charges included $45 million for restructuring businesses and a $7 million loss on asset sales.

Sales in the fourth quarter were more than $2 million, up 3 percent.

Contact Julie M. McKinnon at:


or 419-724-6087.

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