Dana Reports Loss; Cut 10,000 Jobs: Federal Mogul, Lear Also Report Weaker Fourth Quarters Results
Dana Corp. posted a fourth-quarter loss and said it would eliminate 10,000 jobs, or 12 percent of its work force, in recent months to counter a slowdown in the auto industry. The company reported a net loss of $84 million, or 57 cents per share, in the quarter ended Dec. 31. The company broke even in the fourth quarter of 1999.
Excluding one-time charges for additional downsizing, plant closures, costs associated with exiting several lines of business and other items, the company earned $2 million, or one cent a share. The results matched Wall Street expectations. Fourth quarter sales fell 17 percent to $2.69 billion from $3.24 billion in same period in 1999.
“Despite the convergence of so many negative factors impacting the markets that we serve, we will not allow ourselves to accept the kind of financial results we saw this quarter,” said Dana chairman and chief executive Joe Magliochetti. “We have taken and will continue to take decisive actions to better position the company for the challenges we are facing in the near term.”
Dana has closed 11 plants in a little over a year and cut 10,000 of its 85,000 jobs worldwide. The company also has reduced capital spending, consolidated its operations and used the Internet to try to reduce costs.
For all of 2000, the company earned $334 million, or $2.18 per share, compared with $513 million, or $3.08 per share, during 1999. Sales for all of 2000 were $12.3 billion, down from $13.2 billion in 1999.
Two other auto parts makers also reported weak fourth-quarter results and warned that their first quarters are likely to be equally as soft. Federal-Mogul Corp. reported a fourth-quarter loss and said it expects to lose money in the first quarter as well. Lear Corp. said its fourth-quarter profits slipped and predicted its first-quarter operating results will be 22 to 27 cents, less than the 50 cents expected and far below the 93 cents reported a year ago.
Federal Mogul and Lear, two Southfield, Mich.-based companies each told analysts they were assuming car and truck production will be much lower than last year’s 18 million units. Lear estimated 15.4 million units will be built while Federal-Mogul was looking for 14.7 million.
Federal-Mogul lost $69.2 million, or 99 cents a share, from continuing operations in the fourth quarter, compared with a year-earlier profit of $51.0 million, or 87 cents a share. Sales fell to $1.35 billion from $1.57 billion. The company said its net loss including unusual charges was $337.7 million, or $4.80 a diluted share, compared with a profit of $60.2 million, or 85 cents a share, a year earlier. The most recent quarter includes charges of $78.5 million, or $1.11 a share, for a restructuring announced in March and its recent efforts to increase efficiency.
Lear Corp. said income from operations dropped to $1.35 a share from $1.36 a share a year earlier. Sales fell to $3.4 billion from $3.5 billion. Including nonrecurring charges, net income was $72.4 million, or $1.12 a share, compared with $92.7 million, or $1.37 a share, in the fourth quarter of 1999.
In the fourth quarter, Lear completed the sale of four European plastic and metal manufacturing facilities in December for about $30 million, resulting in an after-tax loss of $14.9 million, or 23 cents a share. The businesses, in Italy and Sweden, employed about 1,000 people and had annual sales of $60 million. The company’s earnings-per-share numbers for the most recent quarter were helped by a stock repurchase program that reduced Lear’s shares outstanding by a net 1.9 million shares, or 2.8 percent, during the past year.
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