CHICAGO -- Dana Corp. on Wednesday said quarterly earnings fell, hurt by lower North American light vehicle production and high steel costs, meeting the Wall Street consensus forecast.
Dana said profit rose 19 percent in truck parts, but fell 15 percent in automotive parts, and retained its full-2005 earnings forecast.
Second-quarter net income fell to $51 million, or 34 cents per share, from $110 million, or 73 cents per share, a year earlier, when it reported gains from asset sales and expected tax benefits.
Excluding one-time items, Dana earned 35 cents per share from continuing operations, matching analysts' average forecast as compiled by Reuters Estimates.
Sales rose 13 percent to $2.63 billion, said Dana, which makes transmissions, axles and engine parts for cars and heavy axles, brakes and drivelines for heavy trucks.
Dana said it expects to benefit from subsiding steel costs, particularly important to its automotive group, and believes there is considerable opportunity for more cost cuts.
Steel costs rose $27 million in the quarter from a year earlier and Dana raised its forecast for the full 2005 impact from steel to up $125 million, from up $110 million.
"Results for light vehicles were negatively affected by Dana's large exposure to the full-sized pickup and SUV segment and by higher incremental steel costs," Goldman Sachs analyst Robert Barry said in a research note.
"Still, this result represents a substantial improvement in profitability from the first quarter, demonstrating that Dana is getting traction from its reorg and cost reducing efforts," Barry said.
Dana added $215 million of net new business in the quarter for 2005 to 2007, raising that total to $1.3 billion.
Dana raised its full-2005 production forecast for North American trucks to 310,000 units from 293,000 units and trimmed its 2005 North American light vehicle production forecast to 15.5 million units from 15.7 million units.
Dana left intact its 2005 earnings estimate of $1.30 to $1.45 per share. Analysts' average forecast is $1.21.
Dana ranks No. 7 on the Automotive News list of top 150 original equipment suppliers to North America with original equipment sales of $5.97 billion in 2004.