Why Automotive Supplier Dana Shares Are Falling Tuesday

Dana Incorporated DAN shares are trading lower on Tuesday. The company reported fourth-quarter sales of $2.494 billion, missing the street view of $2.585 billion.

Fourth-quarter sales were lower than $2.555 billion in the year-ago period owing to the impact of the UAW strike on the Light Vehicle Driveline segment, which was partially offset by cost-recovery actions and conversion of the sales backlog.

Adjusted loss attributable to Dana was $(11) million, or $(0.08) per share (missing the consensus of $(0.06), compared with an adjusted net loss of $(15) million or $(0.10) earnings per share in the 2022 quarter. 

Adjusted EBITDA for the fourth quarter of 2023 was $156 million, compared with $176 million for the same period in 2022. Strong efficiency improvements partially offset the margin impact of the UAW strike and higher spending on the development of electric vehicle products.

Free cash flow was $136 million in the fourth quarter, lower than $202 million in the year-ago period, driven by higher working capital requirements.

“Our record three-year new business backlog has grown to $950 million, marking the seventh consecutive year we have recorded an increase,” said James Kamsickas, chairman and chief executive officer. 

Outlook: Dana expects FY24 sales of $10.65 billion-$11.15 billion versus the estimate of $10.98 billion.

Dana expects FY24 diluted earnings per share of $0.35-$0.85, adjusted EBITDA Of $875 million-$975 million, and implied adjusted EBITDA margin of approximately 8.5% at midpoint of the range.

Price Action: DAN shares are trading lower by 8.9% to $12.32 on the last check Tuesday.