Dana Q3 numbers fall but rebound from tough Q2

Power systems manufacturer Dana Inc. (NYSE: DAN) reported dramatically higher third-quarter higher sales and earnings following pandemic-driven lows in the second quarter. Year-over-year results trailed.

Sales of $1.99 billion improved $916 million from the second quarter as the impact of COVID eased. Year-ago revenue was $2.16 billion. Net income was $45 million, or $0.37 per diluted share, compared with $112 million or $0.74 per diluted share in the third quarter of 2019.

Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) was $201 million or 10.1% of sales. That compared with $250 million in the year-ago quarter.

Production strengthens

“Light truck and agriculture demand were especially strong, while many other markets, such as commercial vehicles, realized strengthened production volumes this quarter,” James Kamsickas, Dana chairman and CEO, said in a press release.

Production soared as pandemic-related restrictions lifted, moving to maximum output from practically no production in April and May. Dana’s profit took a hit because so much premium shipping was used to get parts.

“I’ve never in my life taken down over 150 facilities to a dead stop, then started them all up at full giddy-up maximum capacity,” Kamsickas said on the company’s earnings call with analysts Wednesday.

Light vehicles, including full-frame trucks, saw strong demand as automakers restarted production of popular SUVs. Class 8 and medium-duty commercial trucks also rebounded. The off-highway market was stable. Agricultural demand rose.

Charging up electrification

Dana continues to focus its business on electric propulsion acquiring a non-controlling 49% stake in Pi Innovo LLC, which makes embedded software and electronic control units for light vehicle, commercial vehicle, and off-highway markets.

“This acquisition will enable Dana to further enhance our software and controls offerings which are critically important for the management of the complete e-propulsion system,” Kamsickas said.

Integrating efforts across several companies acquired in recent years, Dana is now offering an electrified wheel hub under the Spicer brand for use in material container handlers and scissors lifts found in ports. Dan’s content per vehicle could be four times greater, Kamsickas said.

Dana said its electric vehicle components and systems will eclipse the current 15% of its business in 2021, but it did not provide an estimate.

“Some would have argued that we were ahead of the curve jumping on the electrification and sustainability trail five years ago,” Kamsickas said. “That could be a much stronger push, not just here in the United States, but around the world.”

Full-year guidance restored

Dana restored full-year financial guidance after suspending it during the early days of the pandemic. The company expects sales of $6.650 to $6.950 billion; adjusted EBITDA of $530 million to $590 million, and diluted adjusted earnings per share of $0.35 to $0.55.

The company had total liquidity of approximately $2 billion as of Sept. 30, including $976 million of available cash and marketable securities and $979 million available in revolving credit.