By Sanjana Shivdas
(Reuters) -Dana Inc raised its full-year earnings forecast on Wednesday after beating first-quarter estimates as it rides on strong sales in the light-truck and commercial vehicle market, which has been steadily recovering from pandemic-driven challenges.
Shares of the axle and driveshaft maker were up 2.2% at $28.30 before the bell.
A global shortage of semiconductor chips has led automakers like General Motors (NYSE:GM) and Ford Motor (NYSE:F) to cut production. However, consumer demand remains strong driven by low interest rates, stimulus checks and a preference for private vehicles over public transport.
"Dana realized higher sales... as a result of continued strength in the light-truck market, as well as growth in both the commercial-vehicle and off-highway markets," said Chief Executive Officer James Kamsickas.
He, however, warned that despite a recovery in end-markets from last year's downturn, higher costs due to supply-chain disruptions and shipping constraints continue to challenge the industry.
Dana's sales in the light vehicle segment rose 22.6% to $991 million, while its sales in commercial vehicles rose 5.7% to $352 million.
The company now expects full-year adjusted earnings of between $2.10 and $2.60 per share, compared to a prior forecast of between $1.90 and $2.40 per share.
"As markets continue to recover from the challenges of the global pandemic, strong first-quarter sales provide the conviction to increase our full-year guidance," said Chief Financial Officer Jonathan Collins.
Net income attributable to Dana rose 22.4% to $71 million, or 48 cents per share, in the quarter ended March 31.
Excluding items, the company earned 66 cents per share, above analysts' estimates of 47 cents, according to Refinitiv data.
Net sales rose 17.5% to $2.26 billion, beating estimates of $2.02 billion.