Dana Reports Lower 2Q Earnings; Again Cites High Steel Costs

Click here to write a Letter to the Editor.

eavy-duty component supplier Dana Corp. said Wednesday its net income fell to $51 million or 34 cents a share, from $110 million or 73 cents a year earlier.

Sales rose 13% to $2.63 billion, helped by demand for heavy-truck parts, Dana said in a statement.

In reporting its fourth straight earnings decline, the company said some of its automaker customers built fewer vehicles and that it paid more for steel. Citing high steel prices, it had reported a 72% drop year-over-year in its first-quarter profit. (Click here for previous coverage.)

Steel costs, which contributed to profit declines the previous three quarters, lowered earnings by $27 million for the second quarter, a Dana spokeswoman told Bloomberg.

Dana's two largest customers, General Motors Corp. and Ford Motor Co., reduced North American production in the quarter to trim inventory, Bloomberg reported. Output fell 10% at GM and 4.8% at Ford.

Dana Chief Executive Officer Michael Burns lowered his full-year North American automotive production forecast to 15.5 million vehicles from 15.7 million but kept the 2005 earnings forecast at $1.30 to $1.45 a share.

Net income last year was $82 million, or 54 cents a share.