Dana Corp. Reports Third-Quarter Earnings

Autoparts Report, Dec 4, 2002

Dana Corp. said it recorded improved third-quarter sales and operating earnings strengthened by sustained progress in its restructuring actions. Sales for the period were $2.6 billion, up 7 percent from 2001.

During the third quarter, Dana recorded after-tax charges of $40 million as part of its $445 million restructuring plan announced one year ago. This brings total charges recorded to date to $398 million, or approximately 90 percent of the total program.

Net income, after restructuring charges and other non-recurring items, totaled $4 million, or 2 cents per share. This compares with net income of $13 million, or 8 cents per share, during the same period last year that included goodwill amortization of $9 million after tax.

Exclusive of non-recurring items, Dana's operating earnings for the quarter totaled $44 million, or 30 cents per share, as compared to the consensus estimate of 26 cents per share. On the same basis, the company incurred a net loss of $8 million, or 5 cents per share, during the third quarter of 2001.

Dana's nine-month consolidated sales were $7.9 billion, comparable to sales for the same period last year. Excluding non-recurring items, net income was $139 million, or 94 cents per share, compared with $19 million, or 13 cents per share, in 2001. The company adopted new accounting standard FAS 142, which resulted in an after-tax charge of $220 million during the first quarter of 2002.

Dana also recorded $119 million in restructuring charges during the first nine months of the year and benefitted from a net gain of $27 million on the sale of several non-core operations. As a result, the reported net loss for the first nine months of 2002 was $173 million, or $1.16 per share. This compares to break- even performance for the first nine months of 2001, which included net non- recurring charges of $19 million and goodwill amortization of $23 million after tax.