Dana Corp. to restate earnings for last six quarters
Monday, October 10th 2005, 10:07 am
By: News On 6
TOLEDO, Ohio (AP) _ Auto-parts maker Dana Corp. will restate its earnings for the last six quarters to fix improper accounting for certain items, the company announced Monday. Its stock dropped 25 percent on the news.
The Toledo-based company also has withdrawn its profit forecast for the rest of 2005 and will delay its third-quarter earnings announcement.
Dana said the restatements for all of 2004 and the first two quarters of 2005 stem primarily from improper accounting for issues involving customer pricing and its commercial vehicle business.
Dana, which earlier had reported a profit of $82 million for 2004, did not say how much earnings will be affected. A message was left Monday seeking comment from Dana.
The announcement comes less than a month after the company cut in half its profit outlook for this year. It said soaring energy and steel costs were to blame.
It's also another blow to the struggling auto-parts industry.
Delphi, the largest U.S. auto-parts supplier, filed for bankruptcy Saturday and is expected to cut jobs and close some of its 31 U.S. plants.
The FBI and the Securities and Exchange Commission have been investigating Delphi's accounting practices for several months. Delphi already had restated its earnings for the last five years after conducting an internal investigation.
Dana said Monday it believes it has weaknesses in its internal control over financial reporting. The company has not determined whether the additional revisions to its earnings will be necessary because of the probable weaknesses.
The company's stock fell $2.26, or 25 percent, to $6.93 a share in early trading Monday on the New York Stock Exchange.
Its stock fell last month by 23 percent after announcing it was cutting its profit forecast for the year. The company's shares had been as high as $18.59 during the past 52 weeks.