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DANA HOLDING CORP Reports Operating Results (10-Q)

October 26, 2012 | About:
10qk

10qk

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DANA HOLDING CORP (DAN) filed Quarterly Report for the period ended 2012-09-30.

Dana Holding Corp has a market cap of $1.91 billion; its shares were traded at around $12.84 with a P/E ratio of 6.9 and P/S ratio of 0.3. The dividend yield of Dana Holding Corp stocks is 1.6%.

Highlight of Business Operations:

Light vehicle markets — Gradually improving economic conditions during the past two years and the first nine months of 2012 have contributed to increased light vehicle sales and production levels in North America. Release of built-up demand to replace older vehicles and greater availability of credit have also stimulated new vehicle demand. Nine-month production of around 11.5 million light vehicles is 19% higher than comparable 2011 production of 9.7 million vehicles. Third quarter 2012 light vehicle production levels were about 12% higher than the comparable 2011 period. The higher production occurred predominantly in the passenger car and crossover segments. In the light truck pickup, van and SUV segment where more of our programs are focused, third quarter 2012 production was 5% lower than the same period of last year while nine month 2012 production increased 3% from the comparable 2011 period. As compared to this year’s second quarter, light truck production was down 10%, with light truck pickup, van and SUV production being down 14%. The higher 2012 production levels are generally reflective of higher light vehicle unit sales which are about 14% higher in the first nine months of 2012 than in last year’s first nine months. The light truck pickup, van and SUV segment posted a sales increase of only 5% over the same period. U.S. days supply of total light vehicles at the end of September 2012 was around 59, unchanged from days supply at June 30, 2012 and up from 51 days at December 31, 2011. The increase in overall light vehicle inventory levels from the end of 2011 is driven primarily by activity in the light truck pickup, van and SUV segment. Inventory levels in this segment increased to around 84 days at the end of September 2012, down slightly from 86 days at the end of June 2012, but up considerably from 56 days at the end of 2011.

LVD segment EBITDA of $68 in the third quarter of 2012 was down $6 from 2011, resulting in comparative third-quarter EBITDA margins of 10.3% of sales in 2012 versus 10.7% in 2011. Higher net currency gains in this segment’s EBITDA in the third quarter of 2011 accounted for $8 of the reduced year-over-year EBITDA. Lower third-quarter sales volumes also contributed about $2 of reduced EBITDA as compared to last year. These factors were partially offset by profit improvement from pricing actions and net cost reductions. Nine-month 2012 LVD segment EBITDA of $207 was $7 better than the same period of 2011, with EBITDA margins coming in at 9.8% in 2012 versus 9.9% in 2011. Higher sales volumes, the result of stronger market production levels, increased year-over-year earnings by about $27. Partially offsetting this benefit was the effect of net currency gains that benefited 2011 but not 2012 and higher warranty and other costs.

In the Power Technologies segment, third quarter EBITDA of $29 is $2 lower than 2011, with nine-month 2012 EBITDA of $106 also $2 lower than in 2011. EBITDA as a percent of sales was 12.0% in the third quarter of 2012 compared to 12.1% in 2011, and nine-month 2012 margin of 13.7% is higher than the 13.6% achieved in 2011. This year’s third quarter was adversely impacted by currency translation effects and cost performance. For the nine months ended September 30, 2012, the benefits from stronger sales volumes and lower warranty cost were offset by adverse currency effects and increases in other costs.

Commercial Vehicle segment EBITDA for the third quarter of 2012 of $45 was $16 lower than third quarter 2011 EBITDA, with EBITDA margin of 9.6% for 2012 being down slightly from 10.0% in 2011. Lower sales volumes were the primary reason for reduced EBITDA, reducing profit by about $24 as compared to last year’s third quarter. Net material cost recovery and cost performance partially offset the impact of lower sales volumes. For the comparative nine-month periods, EBITDA of $163 in 2012 was $4 better than 2011, with EBITDA margin of 10.6% in 2012 up more than 100 basis points from the margin of 9.5% of sales in 2011. Material recovery and pricing actions benefited nine-month comparative EBITDA, more than offsetting the $20 impact of lower sales volumes.

In our Off-Highway segment, third-quarter 2012 EBITDA of $48 was up $6 from the third quarter of 2011, improving EBITDA as a percent of sales to 14.0% in 2012 from 10.9% in 2011. Segment EBITDA of $153 for the first nine months of 2012 was up $19 from 2011, resulting in nine-month EBITDA margins of 12.9% in 2012 compared to 11.4% in 2011. For the comparative three-month period ended September 30, material cost savings and other cost improvements drove the year-over-year profit improvement as sales volumes were generally comparable. The nine-month EBITDA improvement reflected a benefit of about $15 from stronger overall sales volumes, with cost reduction actions providing additional profit improvement.

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