Dana (DAN) to Report Q3 Earnings: Here’s What to Expect

Dana Incorporated DAN is slated to release third-quarter 2023 results on Oct 27, before market open. The Zacks Consensus Estimate for the to-be-reported quarter’s earnings per share and revenues is pegged at 12 cents and $2.69 billion, respectively.

For the current quarter, the consensus estimate for Dana’s earnings per share has decreased by 3 cents in the past seven days. Its bottom-line estimates imply a decline of 50% from the year-ago reported number.

The Zacks Consensus Estimate for DAN’s quarterly revenues suggests a year-over-year increase of 6%. Over the trailing four quarters, the company surpassed earnings estimates on three out of the trailing four quarters and missed once, the average surprise being 20.16%. This is depicted in the graph below:

Dana Incorporated Price and EPS Surprise

Dana Incorporated price-eps-surprise | Dana Incorporated Quote

Q2 Highlights

Dana topped the Zacks Consensus Estimate of earnings and revenues in its second-quarter 2023.

Its adjusted earnings per share of 37 cents surpassed the consensus metric of 16 cents and shot up 362.5% year over year.

Consolidated revenues came in at $2,748 million, up 6.3% from the corresponding quarter of 2022 and surpassed the Zacks Consensus Estimate of $2,728 million.

Factors at Play

Dana is struggling with customer demand volatility, supply chain disruptions and currency fluctuations. Amid high labor costs and European energy prices, Dana expects cost inflation to remain a headwind in the year’s second half. Although pricing actions are muting the impact of inflation, a complete offset is unlikely in the second half. High-cost inflation is likely to mar the result of the to-be-reported quarter.

In the second quarter of 2023, Dana’s capital spending rose to $122 million, up from $90 million reported in the corresponding quarter of 2022. Also, during the last reported quarter, the company’s cost of sales rose to $2,477 million compared with $2,403 reported in the corresponding quarter of 2022. The trend of escalating expenses and capex is likely to have continued in the to-be-reported quarter as well, thereby limiting margins.

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for Dana in the quarter to be reported, as it does not have the right combination of the two key ingredients. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is not the case here, as elaborated below.

Earnings ESP: Dana has an Earnings ESP of -39.44%. This is because the Most Accurate Estimate is pegged 5 cents lower than the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: DAN currently carries a Zacks Rank #4 (Sell).

Stocks With the Favorable Combination

Here are a few players from the auto space that, according to our model, have the right combination of elements to post an earnings beat this time around.

Gentex Corporation GNTX will release third-quarter 2023 results on Oct 27. The company has an Earnings ESP of +0.94% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Gentex’s to-be-reported quarter’s earnings and revenues is pinned at 43 cents per share and $559.04 million, respectively. OSK surpassed earnings estimates twice in the trailing four quarters and missed twice, the average surprise being 1.22%.

BorgWarner Inc. BWA will release third-quarter 2023 results on Nov 2. The company has an Earnings ESP of +4.03% and a Zacks Rank #3.

The Zacks Consensus Estimate for BorgWarner’s to-be-reported quarter’s earnings and revenues is pegged at 90 cents per share and $3.72 billion, respectively. BWA surpassed earnings estimates thrice in the trailing four quarters and missed once, the average surprise being 14.4%.

Cummins CMI will release third-quarter 2023 results on Nov 2. The company has an Earnings ESP of +0.48% and a Zacks Rank #3.

The Zacks Consensus Estimate for Cummin’s to-be-reported quarter’s earnings and revenues is pegged at $4.70 per share and $8.19 billion, respectively. CMI surpassed earnings estimates once in the trailing four quarters and missed thrice, the average negative surprise being 5.51%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report