Dana Holding Corp. (NYSE: DAN) has released preliminary financial results for 2015, showing sales are comparable with a year earlier while earnings are slightly lower.
Lower expected customer share in commercial vehicle driveline business was offset by light-vehicle, off-highway and power generation business.
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The truck component maker said sales totaled $6 billion after adjusting for foreign currency exchange rates. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) totaled $655 million, down 0.4% from 2014.
The sales figures also include the divesture of the company’s Venezuela operations.
“Contributions from new business wins and strong North American vehicular markets largely offset weaker demand in the global off-highway and Brazilian markets,” the company said in a news release.
It attributed the earnings performance largely to supply-chain inefficiencies in the company's commercial vehicle segment, which led to increased costs and lower sales with a significant customer.
“The company continued to generate strong free cash flow of approximately $150 million for the year, including significant capital investment for new program launches that will drive organic growth.” Dana said.
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Dana also announced that its board of directors has authorized the repurchase of an additional $300 million of common shares over the next two years. This is in addition to the $1.4 billion share repurchase authorization completed in last year's fourth quarter.
Dana's 2016-2018 sales backlog as of Dec. 31, 2015, rose to $750 million, 10% higher than the revised three-year backlog announced at the beginning of 2015, after adjustment for currency and market demand expectations, according to the company.
“New business wins, primarily in the light vehicle driveline, off-highway driveline and power technologies businesses, drove the net increase in the sales backlog, which more than offset lower expected customer share in commercial vehicle driveline and currency and market demand impacts,” the company said.
Dana said it expects overall demand to be relatively flat in 2016, but increased sales from new customer program launches are expected to provide a partial offset to anticipated currency headwinds.
For 2016 it has issued financial guidance:
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sales of $5.8 to $6 billion;
adjusted EBITDA of $640 to $670 million;
diluted adjusted earnings per share of $1.65 to $1.80, which excludes the its most recently announced share repurchase program.
"Despite the challenging economic environment in some of our markets, our light vehicle driveline, off-highway driveline and power technologies segments each achieved organic sales growth and improved year-over-year margin,” said Dana President and CEO James Kamsickas. "Our commercial vehicle segment was challenged this past year due to a major supplier transition, and while adversely impacting our 2015 performance, this completed initiative has better positioned this business for future success. Looking ahead, we successfully retained our key replacement programs while continuing to grow our sales backlog with new programs in all of our businesses."
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