TOLEDO, OH — Dana Corp. has reported 2004 second quarter sales of $2.3 billion, compared to $2 billion during the same period last year.
Net income for the quarter (including $33 million of unusual net gains) totaled $108 million, or 72 cents per share. This compares to net income (including $5 million of unusual net gains) of $52 million, or 35 cents per share, for the period in 2003.
“We are pleased to have delivered another solid quarter of operational performance with net income, exclusive of unusual items, up 60 percent,” said Dana Chairman and CEO Mike Burns. “At the same time, we’re far from satisfied and continue to pursue greater focus, integration and productivity in line with our commitment to meeting the needs of our global customers.”
The company said second quarter sales were up 16 percent over the same period last year with the majority of the increase being driven by our new business programs and higher production volumes in the principal markets served by Dana, particularly the North American heavy-truck sector.
“Our solid sales growth contributed to stronger bottom-line results,” Burns said. “In addition, we continued to see growth in our gross margin — both year-over-year and sequentially by quarter — as we achieved further cost efficiencies and made progress in addressing the launch costs associated with our structures programs. It’s important to note that these improvements were achieved in spite of the higher cost of steel and certain other raw materials that we experienced during the quarter.
On July 9, Dana announced that it had reached a definitive agreement to sell its automotive aftermarket business to The Cypress Group for approximately $1.1 billion in cash. The sale triggered recognition of $33 million of unusual net gains included in the second quarter of 2004. This included the recognition of $38 million in anticipated tax benefits triggered by the sale of the automotive aftermarket business and transactions that are part of the continuing program to divest assets of Dana Credit Corp. (DCC), which are expected to close during the third quarter. This was partially offset by $5 million of transaction-related expenses.
Dana Vice President and CFO Bob Richter explained, “These transactions are expected to generate capital gains. We had capital loss carryforwards from prior periods that were fully reserved. Since we now expect to be able to use the carryforwards to offset the gains, accounting rules require us to recognize the anticipated tax benefit by releasing a portion of the reserve at this time.
“While we’re happy to benefit from the additional income, we’re pleased that even without these unusual items, we still achieved second-quarter net profit of $75 million, or 50 cents per share, which is up substantially over the prior year.”
Dana’s six-month consolidated sales were $4.6 billion, up from $4 billion during the same period last year. Net income during the first half of 2004 was $171 million, or $1.14 per share, including $35 million in unusual net gains. This compares to net income of $93 million, or 63 cents per share, including $15 million in unusual net gains during the initial six months of 2003.
“Excluding our unusual items and the results of businesses held for sale, our net income from continuing operations improved by more than 60 percent during the first half of 2004, compared to the same period last year,” Burns said. “Again, this improvement was largely the result of new business and strong production volumes in our principal markets.”
To learn more about Dana, go to: http://www.dana.com.
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