Dana Inc (DAN) Q3 2024 Earnings Call Highlights: Navigating Challenges with Strategic Efficiency

GuruFocus News
4 min read

In This Article:

  • Sales: $2.48 billion in Q3, down $193 million from last year.

  • Year-to-Date Sales: $7.95 billion, $119 million lower than last year.

  • Adjusted EBITDA: $232 million in Q3, with a profit margin of 9.4%, a 30 basis points improvement.

  • Year-to-Date Adjusted EBITDA: $699 million, $10 million higher than last year, with a profit margin of 8.8%.

  • Net Income: $4 million in Q3, $15 million lower than last year.

  • Year-to-Date Net Income: $23 million, compared to $77 million last year.

  • Operating Cash Flow: $35 million in Q3, $148 million year-to-date.

  • Free Cash Flow: Use of $11 million in Q3.

  • Full Year Sales Guidance: Lowered to about $10.3 billion.

  • Full Year Adjusted EBITDA Guidance: $875 million, with a profit margin of 8.5%.

  • Full Year Free Cash Flow Guidance: Maintained at $100 million.

  • GAAP EPS Guidance: Expected to be $0.15 per share.

  • Adjusted EPS Guidance: Approximately $0.85 per share.

Release Date: October 30, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Dana Inc (NYSE:DAN) reported a profit margin expansion of 30 basis points, achieving a 9.4% margin in Q3 2024 despite reduced sales.

  • The company has achieved three consecutive years of consistent quarterly adjusted EBITDA margin improvement.

  • Dana Inc (NYSE:DAN) continues to leverage core operations, new technology, and exceptional personnel to strengthen its business.

  • The company has successfully implemented company-wide efficiency improvements, resulting in increased profit margins.

  • Dana Inc (NYSE:DAN) has been recognized as an Automotive News PACE Award Finalist for its innovative hybrid eight-speed dual-clutch transmission.

Negative Points

  • Sales for Q3 2024 were $2.48 billion, $193 million lower than the previous year due to decreased vehicle production.

  • There is a continued weakening demand for ICE, hybrid, and electric vehicles across most mobility markets.

  • The off-highway segment experienced lower demand, particularly in Europe, affecting construction and agriculture equipment markets.

  • Net income attributable to Dana Inc (NYSE:DAN) was $4 million for Q3, about $15 million lower than last year, primarily due to higher income taxes.

  • The planned divestiture of a noncore hydraulics business did not close as expected, impacting financial results.

Q & A Highlights

Q: Can you elaborate on the cost efficiencies that allowed Dana to maintain EBITDA despite a significant drop in traditional organic revenue? A: Timothy Kraus, CFO, explained that the falloff in traditional markets, particularly heavy vehicles, was due to quick order adjustments by customers. The minimal EBITDA impact was due to improved cost efficiencies and favorable mix, allowing Dana to offset the expected contribution margin loss.

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