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Dana Inc. shares tumble on weak FY2024 guidance, Q4 earnings miss

EditorAhmed Abdulazez Abdulkadir
Published 02/21/2024, 01:48 AM
© Reuters.
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MAUMEE, Ohio - Dana Incorporated (NYSE:DAN), a global leader in drivetrain and e-Propulsion systems, reported a fourth-quarter adjusted net loss of $0.08 per share, falling short of analyst expectations by $0.03. The company's revenue for the quarter was $2.5 billion, also below the consensus estimate of $2.56 billion. The stock responded negatively to the news, with shares dropping 8.5% as the company's full-year guidance for 2024 missed analyst projections.

The company's forecast for the full year 2024 includes an EPS range of $0.35 to $0.85, significantly below the consensus estimate of $1.26. Additionally, Dana anticipates revenue between $10.65 and $11.15 billion for FY2024, compared to the consensus estimate of $10.974 billion. This guidance suggests a cautious outlook, with the midpoint of the EPS guidance range at $0.60, nearly 52% lower than the consensus, and the midpoint of the revenue guidance range at $10.9 billion, slightly below the consensus.

Despite the lower-than-expected fourth-quarter results and cautious guidance, Dana reported a record sales year in 2023, with a 4% increase to $10.6 billion over the previous year. The adjusted EBITDA for the year also grew by $145 million, reaching $845 million. The company attributes the growth to improved market demand, the conversion of sales backlog, and pricing actions, which were partially offset by a United Auto Workers (UAW) strike.

James Kamsickas, chairman and CEO of Dana, commented on the results, "With record sales reaching $10.6 billion for 2023, Dana continues its strong trajectory built on our balanced approach of supplying both conventional and clean-energy solutions to nearly every vehicle manufacturer around the globe." He also noted the company's success in launching a record number of programs across all markets served, which contributed to the substantial profit conversion on growth.

Investors reacted to the earnings miss and the subdued outlook for 2024, with the stock experiencing a significant decline. The company's performance was impacted by the UAW strike and higher spending on the development of electric-vehicle products. Nonetheless, Dana remains optimistic about its future, expecting another record sales year, improved margins, and higher free cash flow in 2024, leveraging improved cross-company efficiencies and the record number of new and refreshed vehicle programs.

InvestingPro Insights

Dana Incorporated's (NYSE:DAN) recent financial performance and future outlook have been a focal point for investors. With a market capitalization of $1.78 billion, Dana's forward-looking statements have raised questions about its profitability and growth prospects. According to InvestingPro data, Dana's revenue for the last twelve months as of Q3 2023 stood at $10.62 billion, marking a 7.51% growth. Despite this, the company's gross profit margin during the same period was relatively low at 8.63%, which aligns with the InvestingPro Tips indicating weak gross profit margins.

However, investors might find solace in the fact that Dana has maintained dividend payments for 13 consecutive years, with the dividend yield as of the last dividend date standing at 2.96%. This commitment to returning value to shareholders is noteworthy, especially given the stock's volatility and recent price decline. The company's stock price is currently at 68.46% of its 52-week high, with a previous close price of $13.52.

Looking ahead, analysts have revised their earnings upwards for the upcoming period, and Dana is expected to be profitable this year, as per additional InvestingPro Tips. With 7 more tips available on InvestingPro, investors can gain deeper insights into Dana's financial health and prospects. Additionally, users can utilize the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, accessing a wealth of investment analysis and data to make informed decisions.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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