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Revenue: $2.7 billion, up $91 million year-over-year.
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Adjusted EBITDA: $223 million, increased by $19 million.
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Free Cash Flow: Use of $172 million, an improvement of $118 million from the previous year.
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Net Income: $3 million, down from $28 million in the previous year.
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Profit Margin: 8.2%, a 50 basis points improvement.
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EV Sales: Expected to be approximately $1 billion for the year.
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Full Year Free Cash Flow Outlook: Raised to $75 million at the midpoint, a 50% increase over prior guidance.
Release Date: April 30, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Can you clarify the $0.25 drag from divestitures in earnings that was actually contemplated in the original guidance of $0.60 or? A: Timothy Kraus, CFO of Dana Inc, confirmed that the $0.25 drag from divestitures was included in the original EPS guidance of $0.60, although it was not specifically called out at the time of the announcement.
Q: How are the off-highway margins holding up, and what is driving the positive EBITDA impact despite lower sales? A: Timothy Kraus explained that the positive EBITDA impact in the off-highway segment is driven by a favorable mix and cost flexing across the business unit to adjust to the lower sales environment.
Q: Could you discuss the overall demand trends for the EV programs you’re involved in and how you expect commercial EV sales to ramp through the year? A: Timothy Kraus noted that demand trends for EV programs are in line with their expectations, with some softness in EV demand across end markets. However, Dana’s plans for the year remain on track.
Q: What is your visibility into North America truck production for the remainder of the year, and how might ramping EV volumes influence profitability for that segment? A: Timothy Kraus provided estimates for Class 5-7 and Class 8 truck production volumes and noted that while EV sales in that segment are slightly down, Dana continues to adjust and deliver necessary products for their customers.
Q: Can you provide more clarity on what’s happening with the True-up around commodities, particularly how lower steel prices are leading to a bigger commodities tail? A: Timothy Kraus explained that the commodity price mechanisms typically cover only 75% of costs, leading to higher givebacks when prices fall. There’s also a lag in adjustments, which contributes to the current situation where lower steel prices lead to higher top-line givebacks but not full bottom-line impact.
Q: Regarding your CapEx guide for the year, why shouldn’t we expect the declines noted in 1Q to continue throughout the year? A: Timothy Kraus indicated that while there’s a lot of timing involved in CapEx spend, Dana is comfortable with the $450 million guidance for the full year, suggesting that the full $50 million decrease realized in Q1 might not necessarily continue at the same rate.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.