Dana Boosts Gross sales and Revenue Estimates After Robust First Quarter Outcomes

Driveline provider for business autos Dana Inc. (NYSE: DAN) exceeded analysts’ expectations within the first quarter, regardless of provide chain constraints and rising commodity costs.

The Maumee, Ohio-based firm has been much less uncovered to the worldwide semiconductor scarcity than anticipated.

“We’ve seen our prospects divert chips to the key truck platforms that we produce,” stated Jonathan Collins, govt vp and chief monetary officer of Dana on Wednesday.

The present microchip constraint may sting a bit extra within the present quarter, and $ 125 million in further commodity prices has squeezed revenue margins.

“We needed to rent premium freight [charges] approach above what we’d usually do, ”Collins stated. “Our operations are much less environment friendly once we anticipate elements. Extra time and different components additionally contribute to this. “

The demand, particularly for heavy and medium truck parts and programs, has exceeded the upper prices.

“We have seen heavy and medium autos perform a little higher than we anticipated,” Collins stated. “The rebound in gross sales of Class 8 vans continues as anticipated [full-year] manufacturing of round 300,000 items. “

In numbers

Dana posted gross sales of $ 2.26 billion in comparison with $ 1.93 billion, a rise of $ 337 million from the earlier yr quarter. Adjusted web revenue was $ 97 million from $ 66 million, a rise of $ 29 million from a yr in the past. Diluted earnings per share (EPS) of 48 cents elevated 8 cents yr over yr.

A consensus of analysts polled by investor web site Searching for Alpha predicted EPS of 47 cents and income of $ 1.96 billion.

Dana’s adjusted earnings earlier than curiosity, taxes, depreciation and amortization (EBITDA) had been $ 234 million or 10.3% of gross sales, in comparison with $ 205 million for a similar interval in 2020.

The quarter would have been higher with out the microchip scarcity and rising costs for metal, aluminum and different commodities. Dana recovers many of the prices by charging increased costs, however the portion of the will increase absorbed by the corporate minimize earnings by about half a proportion level, Collins stated.

Dana has raised his monetary forecast for the complete yr: he now expects income of $ 8.50 billion to $ 9 billion, or $ 500 million above his estimate earlier. Adjusted EBITDA is anticipated to be between $ 920 million and $ 1 billion. At mid-term, EBITDA would equal 11% of gross sales. Adjusted diluted earnings per share is anticipated to be between $ 2.10 and $ 2.80, a rise of 20 cents.

Electrification aspirations

Dana is investing worldwide to develop its electrification manufacturing, including 250,000 sq. ft of latest capability in China, India and the UK.

“By increasing our electrification manufacturing footprint, not solely are we putting in the power to help present and future volumes, however we’re additionally strengthening our electrification design, engineering and manufacturing capabilities,” stated James Kamsickas, Chairman and CEO of Dana.

The corporate claims to supply the one full and absolutely built-in electrified system in all of its markets – gentle autos, utility autos and off-road autos. A lot of this has occurred by way of acquisitions.

For instance, Dana purchased in March the 51% of Pi Innovo Holding Restricted that she didn’t already personal. Pi Innovo designs, develops and manufactures digital management items in a variety of purposes and industries. The overall buy worth was $ 35 million.

Dana expects revenue margins of round 12% over the following few years and tasks including $ 1 billion to gross sales, a lot of it in electrification, akin to its $ 200 million contract. {dollars} to affect Kenworth and Peterbilt medium vans for PACCAR Inc. (NASDAQ: PCAR).

“We produce the whole electrified powertrain, not solely the electrical drivetrain, but additionally {the electrical} energy system and the whole built-in software program and controls of the car,” Kamsickas stated.

Dana information half of $ 700 million backlog from electrification contracts

Dana builds vertical electrification for business autos

CES 2020: Kenworth collaborates with Dana on a median electrical truck

Click on for extra FreightWaves articles by Alan Adler.

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