Dana Inc. said Thursday that weaker demand in a key segment and the impact of the COVID-19 pandemic weighed on its first-quarter sales and profits.
The axles and transmission supplier said sales fell nearly 11 percent to $1.93 billion in the quarter.
A sluggish heavy-vehicle market in January and February and production halts across all mobility markets in March as a result of the global response to COVID-19 impacted sales, the company said.
Dana reported net income of $38 million, down 61 percent from the same period last year. This includes a goodwill impairment charge of $51 million resulting from the impact of the virus, the company said.
First-quarter adjusted earnings before interest, taxes, depreciation and amortization dropped 20 percent to $205 million. Dana said cost management helped mitigate the margin impact of the sales decline in the first quarter.
Dana joins several suppliers that have reported earnings during the crisis. Many others are expected to post their results over the next few weeks.
Shares of Dana were up a fraction to $10.46 in early trading Thursday.
COVID-19 update
“The response to the global pandemic is presenting unprecedented challenges for Dana as well as our people, customers, suppliers and communities,” CEO Jim Kamsickas said in the statement. “The rapid onset of containment measures and disruption to production schedules has challenged our organization like never before.”
Dana withdrew its 2020 financial guidance March 23 and continues to refrain from issuing a forecast. Most major suppliers have withdrawn their full-year financial projections because of the pandemic.
The company said it has total liquidity of more than $1.8 billion, including available cash and marketable securities of $646 million. It also has $679 million available on its committed revolving credit facility and $500 million available under a recently announced bridge facility.
Dana, one of the oldest companies in the automotive supply chain with roots dating back 116 years, generates about 20 percent of its annual revenue from Ford Motor Co. and another 11 percent from Fiat Chrysler Automobiles, according to its annual 10-K report filed with U.S. regulators.
Dana, of Maumee, Ohio, ranks No. 33 on the Automotive News list of top 100 global suppliers with parts sales to automakers of $8.14 billion in its fiscal 2018.
