November 6, 2008 / 3:51 PM / 10 years ago

UPDATE 2-Dana loss deepens; shares down 13 percent

* Q3 loss widens from year ago

* Closing 10 plants, axing 2,000 more jobs

* Sees 2009 revenues down as much as 12 percent (Adds 2009 revenue forecasts, details of restructuring actions, shares, bylines)

By Soyoung Kim and Kevin Krolicki

DETROIT, Nov 6 (Reuters) - Auto parts supplier Dana Holding Corp (DAN.N) said on Thursday its quarterly net loss nearly quadrupled from a year ago and said it would close up to 10 plants and cut an additional 2,000 jobs.

Shares of Dana fell 13 percent.

Dana forecast declines of up to 12 percent in 2009 revenues due to weakening vehicle production volumes, and said it was reviewing “strategic options” for three of its seven business units — sealing, thermal, and structural products. It expects a decision on the businesses by early 2009.

Dana said it is talking to lenders about changing the terms on its credit facility because it expects to be unable to meet financial covenants under the current terms of the borrowing arrangement, adding amendment discussions would likely be concluded in the next few weeks.

“The industry situation right now forces us to move as quickly as we can in this environment,” Executive Vice Chairman John Devine said on a conference call with analysts.

“Now I would say the biggest issue is fixing North America. We have to get this business profitable and cash flowing, and that’s our primary focus right now,” said Devine, adding that Dana expected 2009 auto production levels to be below those of 2008.

To “size the company to lower industry volumes”, Dana said it will close up to 10 plants in 2009 and 2010 and cut 5,000 jobs this year, up from an earlier plan for 3,000 job cuts.

Toledo, Ohio-based Dana, which emerged from bankruptcy earlier this year, posted a third-quarter net loss of $271 million, compared with a loss of $69 million a year earlier.

After an $8 million dividend payout to preferred shareholders, the net loss per share of common stock was $2.78, compared with a loss of 42 cents per share a year earlier.

Sales dropped 9 percent to $1.93 billion.

JPMorgan analyst Himanshu Patel said in a research note the revenue decline was significantly bigger than his estimate for a 1 percent decline.

Dana expects 2009 revenue to be in the range of $7.2 billion and $7.3 billion, down from a projected $8.2 billion this year.

Dana expects to take a charge of between $100 million and $150 million for its planned plant closures, which it estimates will save $40 million annually once the plants are closed.

It has only identified one of the affected facilities — a driveshaft plant near Quebec — but said most of the closures will be in the United States and Canada.

Dana’s shares 25 cents to $1.64 on the New York Stock Exchange in late morning trading. (Editing by Brian Moss)

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