Dana Holding Corporation (DAN) has announced the opening of two new distribution centers in China and Mexico. The centers are located in Toluca, Mexico, and Wuxi, Jiangsu Province, China. The new additions will increase the number of aftermarket distribution centers to 17 globally. The centers will be serving as distribution hubs in the regions and will be supplying parts for the company’s light vehicle, commercial vehicle, and off-highway customers.
These distribution centers will enhance the product availability, strengthen the supply chain, and support the additional number of aftermarket customers. In addition, the new centers will help the company to improve its global distribution system, and address the rising demand of its products. Management believes that the expansion of the service network will deliver the essential logistical support along with ensuring the quality of the aftermarket products more efficiently.
The facility in Mexico, which was inaugurated last month, provides on-highway aftermarket products and the company has plans to incorporate off-highway products in the future as well. The distribution centre in China, which will be operating from this month, will deliver off-highway products initially. The company also expects to incorporate light-vehicle components in the next few months.
Dana, in the second quarter of 2012, registered a 24% increase in its profit to $120 million or 56 cents per share from $97 million or 45 cents a year ago. The earnings per share surpassed the Zacks Consensus Estimate by 5 cents. The higher profit was attributable to the company’s emphasis on cost control and efficiency from operations.
Total revenues went up 1% year over year to $1.95 billion in the quarter, owing to the regional diversity which places the company in an advantageous position. However, revenues were adversely affected by currency headwinds and lower commercial vehicle production in South America.
Maumee, Ohio based Dana is one of the world’s leading suppliers of driveline, sealing, and thermal technologies, which improves the efficiency and performance of passenger, commercial and highway vehicles. The company’s major competitors include Magna International Inc. (MGA) and American Axle & Manufacturing Holdings Inc. (AXL). Currently, Dana retains a Zacks #3 Rank, which translates into a short-term (1 to 3 months) Hold rating.
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