Auto supplier Dana Inc. said fourth-quarter profitability and cash flow fell as the company posted higher interest costs, taxes and one-time expenses while it accelerated investment in electrification.
For the year, COVID-19 production shutdowns caused sales and profit declines in 2020 and led to a net loss of $31 million, marking a dip from the company's $226 million net gain in 2019, the company said Thursday.
The Ohio-based axles and transmission producer joined several suppliers this month in reporting fourth-quarter and full-year earnings as the COVID-19 crisis lingers around the globe. More companies are set to report results over the next few weeks.
Dana said net income fell 53 percent to $40 million in the fourth quarter. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) dropped 15 percent to $192 million. Adjusted free cash flow fell 79 percent to $46 million.
"Lower cash generation was driven by lower earnings, higher cash income taxes and interest, and lower cash generated from working capital as sales continued to recover from the COVID-related shutdowns," the company said in a statement.
Revenue increased 6 percent to $2.1 billion.
For all of 2020, Dana reported adjusted EBITDA fell to $593 million compared with $1.02 billion in 2019.
Dana's full-year revenue fell 17 percent to $7.1 billion. The company said sales fell because of weaker demand across all mobility markets through mid-2020 — the effect of customers idling operations during the pandemic.
The company said it expects 2021 revenue of between $8.05 billion and $8.55 billion. It projects adjusted earnings between $860 million and $960 million.
"Reflecting on 2020, it was truly a unique year and challenging environment," CEO James Kamsickas said in the statement, adding that Dana finished the year with positive free cash flow. "We also further secured our leadership position in the e-Mobility space with 50 percent of our $700 million new business backlog coming from electric or hybrid programs, demonstrating our promise to lead in this fast-growing segment."
Dana shares fell 8 percent to close at $20.99 in New York.
Dana ranked No. 30 on the Automotive News list of the top 100 global suppliers, with worldwide parts sales to automakers of $8.6 billion in 2019.