Analysts Worry Dana Is Sputtering; Even With Commercial-Truck Environment Strong, Auto-Parts Supplier Draws Concern
Dow Jones Newswires</br></br>DANA CORP.'S DISMAL third-quarter results have led some analysts to worry that the auto-parts supplier could face dwindling cash and a weakened balance sheet this year, even amid a boom in one of its key markets.</br></br>The Toledo, Ohio, company faces a critical year in which it must fix its operations and renegotiate bank agreements. As with many auto suppliers, Dana is struggling with higher raw-material costs and exposure to the decline in U.S. market share by Detroit's big auto makers, General Motors Corp. and Ford Motor Co. Ford accounted for 25% of Dana's revenue in 2004 and GM 11%.</br></br>Dana Chief Financial Officer Robert Richter said it expects cash flow from operations and the sale of three business lines will provide adequate liquidity.</br></br>Dana, which makes axles, frames and other parts for cars and commercial trucks, reported a third-quarter net loss of $1.27 billion, or $8.50 a share, on revenue of $2.41 billion. While charges were responsible for most of that loss, the company lost $63 million on operations despite a 13% increase in revenue compared with the year- earlier period. Dana's stock was down 19% last week.