Dana posts $431M loss in '09; sales down 35%

Hurt by slumping production in all three of its key vehicle markets, Dana Holding Corp. yesterday reported that its 2009 sales fell by 35 percent and the company posted a loss of $431 million.

The Maumee automotive parts maker's full-year loss, which equaled $4.19 a share, compared to a profit of $32 million that Dana said it had in 2008, a year in which it emerged from Chapter 11 bankruptcy.

Dana's drop in sales last year to $5.2 billion from $8 billion in 2008 was caused by decreased production by makers of light trucks and heavy trucks, which felt the sting of lower demand because of the struggling economy.

The lower revenue dropped Dana from its perennial perch as the Toledo-area's largest company. It is now second to Owens-Illinois Inc. of Perrysburg, which had 2009 sales of $7.1 billion. It still surpasses Owens Corning of Toledo, which had sales last year of $4.8 billion.

The Dana numbers didn't scare investors, as the stock rose yesterday 30 cents to close at $10.94 on the New York Stock Exchange. There was no indication from Dana executives that the financial performance will result in plant closings or layoffs.

Dana executives were upbeat during a conference call with analysts, noting that the sales decline was largely offset by $500 million in operational improvements stemming from lower costs, higher profit margins, and favorable currency conversions.

"No one at Dana is relaxing. We know we still have a lot to do," company Chairman John Devine told analysts.

For the fourth quarter, Dana posted a loss of $236 million, or $2.02 a share, which compared with a loss of $249 million, or $2.57 a share, for the same period a year earlier.

The latest quarterly results included a $153 million charge for the sale of Dana's Structures business.

Analysts surveyed by Thomson Reuters had expected a loss of 8 cents a share for the quarter, and a loss of 92 cents for the year. For 2010, analysts are expecting a profit of 36 cents a share.

James Sweetnam, Dana's president and chief executive, said the company is "glad to have 2009 behind us."

The company will continue to cut costs even though it has reduced its work force by 30 percent since 2007 in an effort to resize its global footprint and "operate as one Dana."

At year's end, the company had paid down its term debt by $137 million and bought back $126 million in notes. It also raised its free cash flow to $109 million. Mr. Devine said the company hasn't decided what it will do with its available cash but it has several possibilities, including restoring its dividend, paying off a $77 million tax issue dating to the 1990s, and possibly funding a new joint venture in China.

Company executives yesterday gave an upbeat look at 2010. Overall, it foresees global vehicle production to rise about 10 percent in the markets to which it supplies parts. The company also believes it has a chance to capture new business in the range of $650 million to $700 million, with about two thirds coming from outside North America.

The Fortune 500 firm expects its sales to rise 5 to 10 percent.

The key to growth, Mr. Sweetnam said, is new product development. In that regard, the CEO said Dana has introduced new axles for heavy vehicles, a new oil pan for Ford's F-Series trucks, new driveshafts for light vehicles made by Nissan and Volkswagen, and battery cooling technology for electric vehicles that will be used in the new Tesla Motors Roadster Sport.

Contact Jon Chavez at:

jchavez@theblade.com

or 419-724-6128.