Dana Holding Corp. (DAN, Financial) filed Quarterly Report for the period ended 2009-03-31.
DANA HOLDING CORP is a world leader in the supply of axles; driveshafts; and structural sealing and thermal-management products; as well as genuine service parts. The company's customer base includes virtually every major vehicle and engine manufacturer in the global automotive commercial vehicle and off-highway markets. Dana Holding Corp. has a market cap of $169.3 million; its shares were traded at around $1.69 .
North America Developments in this region have a significant impact on our results as North America accounts for approximately 70% of our sales in the commercial vehicle market. Production of heavy-duty (Class 8) vehicles during the first quarter of 2009 of approximately 28,000 units compares to 47,000 units produced in the first quarter of 2008, a decline of 40%. In the medium-duty (Class 5-7) market, first quarter 2009 production of 25,000 units was down 44% from last years first quarter production of 45,000 units. The commercial vehicle market is being impacted by many of the same overall economic conditions negatively impacting the light vehicle markets, leading customers to be cautious about new vehicle purchases. As a result of greater, more protracted economic weakness, customer demand and production during the remainder of 2009 are expected to be lower. Whereas earlier this year we expected North American Class 8 production in 2009 to rebound to about 160,000 units, we now believe the economic conditions could limit 2009 production to about 135,000 units, which would represent a decrease of about 30% compared to full year 2008. In the Class 5-7 segment, our production expectations have softened as we currently expect production of around 130,000 units down from full year production of 157,000 units in 2008. (Source: Global Insight and ACT).
Our off-highway business, which has become an increasingly more significant component of our total operations over the past few years, accounted for 22% of our 2008 sales. Unlike our on-highway businesses, our off-highway business is largely outside of North America, with about 75% of its sales coming from outside North America. We serve several segments of the diverse off-highway market, including construction, agriculture, mining and material handling. Our largest markets are the European and North American construction and agricultural equipment segments. After being relatively strong through the first half of 2008, customer demand in these markets began softening during the last six months of 2008. The effects of a weaker global economy are now expected to more significantly impact this market in 2009, as it has our other markets. Earlier this year, we had forecast reductions in 2009 demand in the North American and European construction markets of about 40% and reductions in agricultural market demand in 2009 of around 20%. We currently expect that construction market demand could be reduced by as much as 70%, with agricultural market demand being down about 40%.
Sales for the first quarter of 2009 in North America, adjusted for currency, declined approximately 46% due to the lower production levels in both the light duty and commercial vehicle markets. Light truck production was down about 51% compared to the first three months of 2008 and commercial vehicle truck production was down more than 40%. The impact of lower vehicle production levels was partially offset by the impact of higher pricing, including recovery of higher material costs.
Our Light Vehicle Driveline, Sealing, Thermal and Structures segments principally serve the light vehicle markets. Exclusive of currency effects, sales in Light Vehicle Driveline declined 46%, in Thermal 44% and in Structures 53%, all principally due to lower production levels. The sales decline, exclusive of currency effects, in Sealing was lower at 34%, in part due to this business having a larger proportionate share of sales to the aftermarket.
Our Commercial Vehicle segment is heavily concentrated in the North American market where Class 8 commercial truck production was down 40% and Class 5-7 commercial truck production was down 44%. The sales decline in Commercial Vehicle, exclusive of currency effects, was 32% as the volume reduction associated with lower production levels was partially offset by higher pricing under material cost recovery arrangements.
Read the The complete ReportDAN is in the portfolios of David Tepper of APPALOOSA MANAGEMENT LP, David Einhorn of Greenlight Capital Inc.
DANA HOLDING CORP is a world leader in the supply of axles; driveshafts; and structural sealing and thermal-management products; as well as genuine service parts. The company's customer base includes virtually every major vehicle and engine manufacturer in the global automotive commercial vehicle and off-highway markets. Dana Holding Corp. has a market cap of $169.3 million; its shares were traded at around $1.69 .
Highlight of Business Operations:
Rest of the World Outside of North America, overall global economic weakness is impacting light vehicle production, just as it has in North America. Light vehicle production outside of North America during the first three months of 2009 was about 34% lower than the first three months of 2008. The production declines are evident in all regions, as first-quarter production levels in Europe were down more than 40%, Asia Pacific down about 30% and South America down about 25% versus volumes in the first quarter of 2008. Expected production levels for the remainder of 2009 have been reduced from forecasts earlier this year as the effects of the global economic weakness are now expected to be more significant and last longer. Whereas 2009 vehicle production outside of North America was projected at around 50 million units earlier this year, the current expectation is that unit production will be closer to 45 million units which compares to 2008 global light vehicle production, excluding North America, of about 55 million units. (Source: Global Insight).North America Developments in this region have a significant impact on our results as North America accounts for approximately 70% of our sales in the commercial vehicle market. Production of heavy-duty (Class 8) vehicles during the first quarter of 2009 of approximately 28,000 units compares to 47,000 units produced in the first quarter of 2008, a decline of 40%. In the medium-duty (Class 5-7) market, first quarter 2009 production of 25,000 units was down 44% from last years first quarter production of 45,000 units. The commercial vehicle market is being impacted by many of the same overall economic conditions negatively impacting the light vehicle markets, leading customers to be cautious about new vehicle purchases. As a result of greater, more protracted economic weakness, customer demand and production during the remainder of 2009 are expected to be lower. Whereas earlier this year we expected North American Class 8 production in 2009 to rebound to about 160,000 units, we now believe the economic conditions could limit 2009 production to about 135,000 units, which would represent a decrease of about 30% compared to full year 2008. In the Class 5-7 segment, our production expectations have softened as we currently expect production of around 130,000 units down from full year production of 157,000 units in 2008. (Source: Global Insight and ACT).
Our off-highway business, which has become an increasingly more significant component of our total operations over the past few years, accounted for 22% of our 2008 sales. Unlike our on-highway businesses, our off-highway business is largely outside of North America, with about 75% of its sales coming from outside North America. We serve several segments of the diverse off-highway market, including construction, agriculture, mining and material handling. Our largest markets are the European and North American construction and agricultural equipment segments. After being relatively strong through the first half of 2008, customer demand in these markets began softening during the last six months of 2008. The effects of a weaker global economy are now expected to more significantly impact this market in 2009, as it has our other markets. Earlier this year, we had forecast reductions in 2009 demand in the North American and European construction markets of about 40% and reductions in agricultural market demand in 2009 of around 20%. We currently expect that construction market demand could be reduced by as much as 70%, with agricultural market demand being down about 40%.
Sales for the first quarter of 2009 in North America, adjusted for currency, declined approximately 46% due to the lower production levels in both the light duty and commercial vehicle markets. Light truck production was down about 51% compared to the first three months of 2008 and commercial vehicle truck production was down more than 40%. The impact of lower vehicle production levels was partially offset by the impact of higher pricing, including recovery of higher material costs.
Our Light Vehicle Driveline, Sealing, Thermal and Structures segments principally serve the light vehicle markets. Exclusive of currency effects, sales in Light Vehicle Driveline declined 46%, in Thermal 44% and in Structures 53%, all principally due to lower production levels. The sales decline, exclusive of currency effects, in Sealing was lower at 34%, in part due to this business having a larger proportionate share of sales to the aftermarket.
Our Commercial Vehicle segment is heavily concentrated in the North American market where Class 8 commercial truck production was down 40% and Class 5-7 commercial truck production was down 44%. The sales decline in Commercial Vehicle, exclusive of currency effects, was 32% as the volume reduction associated with lower production levels was partially offset by higher pricing under material cost recovery arrangements.
Read the The complete ReportDAN is in the portfolios of David Tepper of APPALOOSA MANAGEMENT LP, David Einhorn of Greenlight Capital Inc.
