DETROIT -- Shares of Dura Automotive Systems Inc. stock dropped steeply Thursday after the company reported dismal second-quarter results, prompting bankruptcy speculation.
Dura stock closed Thursday down 55.7 percent at 69 cents a share.
The company, based in Rochester Hills, Mich., said it lost $131.3 million and may need to take an asset-impairment charge on the value of its largest division.
Dura's results prompted one analyst to warn investors to stay away from the company's stock and to speculate about the potential of bankruptcy.
"Major downturn in operating performance materially raises risk of bankruptcy filing," David Lieker, an equity analyst with Robert W. Baird & Co. said in a report published Thursday. "While we previously thought this risk was further on the horizon, today's results pull that considerably forward. . . . Investors should avoid this stock."
During a conference call with analysts, the company was pressed to answer questions about its financial stability.
"We are comfortable that the liquidity that we have is sufficient to complete our timely completion of our restructuring plan and meet our daily needs," said Keith Marchiando, Dura's CFO, during the call.
Marchiando declined to answer a question about whether Dura has hired or plans to hire financial restructuring experts.
For the quarter ending July 2, Dura reported a net loss of $131.3 million on revenue of $573.3 million. That compares with net income of $2.9 million on revenue of $623.8 million for the same period last year.
Dura, which makes auto parts such as parking brakes, gearshifts and hood and tailgate latch systems, said its sales decline was caused by lower North American and European automotive production, an unfavorable vehicle platform mix and the loss of the seat-adjuster business for General Motors' full-sized SUVs and pickups.
Dura CEO Larry Denton said during the conference call that the company's financial performance was affected by higher-than-expected raw material prices, especially for aluminum and steel.