Why Automotive Supplier Dana Shares Are Falling Tuesday
Portfolio Pulse from Nabaparna Bhattacharya
Dana Incorporated (NYSE:DAN) shares fell after reporting Q4 sales of $2.494 billion, missing the expected $2.585 billion. The decrease from the previous year's $2.555 billion was attributed to the UAW strike's impact on the Light Vehicle Driveline segment, despite cost-recovery actions and sales backlog conversion. The adjusted loss was $(11) million, or $(0.08) per share, missing the $(0.06) consensus. Adjusted EBITDA was $156 million, down from $176 million in 2022, with efficiency improvements partially offsetting the UAW strike and higher electric vehicle development costs. Free cash flow also decreased to $136 million from $202 million due to higher working capital requirements. Dana's three-year new business backlog has grown to $950 million. For FY24, Dana expects sales of $10.65 billion-$11.15 billion and diluted EPS of $0.35-$0.85, with an adjusted EBITDA of $875 million-$975 million.
February 20, 2024 | 5:38 pm
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Dana Incorporated shares fell due to Q4 sales missing expectations and a wider adjusted loss. The company faces challenges from the UAW strike and increased spending on electric vehicle development, but anticipates growth in FY24 sales.
Dana's stock price fell significantly due to the reported earnings miss and the negative impact of the UAW strike on its operations. The adjusted loss being wider than expected and the decrease in free cash flow highlight operational challenges. However, the company's optimistic outlook for FY24, including expected sales growth and a substantial new business backlog, suggests potential for recovery. The immediate negative reaction is due to the earnings miss and operational challenges, but future prospects could offer some upside.
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