Dana's Adjusted Margin Climbs To 10.7% On Truck Demand, But Tax Charges Push Continuing Operations To A Loss
The drivetrain supplier raised its sales outlook and added $100 million of fourth-quarter buybacks as its Eaton Mobility deal nears a close.
Dana, which makes axles, driveshafts and transmissions for on-highway vehicles, said Wednesday that stronger commercial-truck demand lifted third-quarter sales to $2.04 billion and pushed its adjusted EBITDA margin to 10.7%. A debt-redemption loss and a foreign tax settlement still left continuing operations with a $10 million loss.
Margins up, bottom line down
Sales rose from $1.92 billion a year earlier, which the company attributed mainly to stronger commercial vehicle demand, backlog conversion and commercial and cost-recovery actions. Commercial Vehicle sales were $667 million against $564 million; Light Vehicle sales were $1.371 billion against $1.353 billion.
Adjusted EBITDA, an earnings measure that strips out interest, taxes, depreciation and one-off items, was $218 million, versus $162 million and an 8.5% margin a year earlier. Dana credited cost savings, efficiency gains and commercial initiatives.
Continuing operations lost $10 million, or $0.13 per share, against income of $13 million, or $0.07 per share, last year. A $24 million loss on retiring debt and higher taxes, including a $29 million charge to settle a foreign income tax partly offset by a $12 million benefit from restructuring after the Off-Highway sale, outweighed better operating results. Adjusted net income improved to $44 million, or $0.41 per share, from an adjusted loss of $5 million.
Net income, including $29 million from discontinued operations, was $15 million. Adjusted free cash flow fell to $66 million from $101 million.
Bigger buybacks, higher sales outlook
Dana bought back about 6.6 million shares for $200 million in the quarter, bringing the year-to-date total to $369 million, and plans roughly $100 million more in the fourth quarter. CEO Byron Foster said the larger repurchases show "our confidence in Dana and our commitment to shareholder value."
The company raised its 2026 sales outlook by about $50 million to $7.75 billion to $7.85 billion. It held adjusted EBITDA at $800 million to $850 million, diluted adjusted EPS at $1.75 to $2.25 and adjusted free cash flow at $275 million to $375 million.
Eaton Mobility deal nears the finish
Dana plans to combine with Eaton's mobility business in a split-off structured as a Reverse Morris Trust, which is intended to be tax-free to both companies' shareholders for U.S. federal income tax purposes. Nearly all regulatory approvals are in, with one pending.
Management's slides target a close around the end of the first quarter of 2027 and at least $250 million of run-rate cost synergies within 24 months afterward. They show pro forma net leverage of about 1.6 times, including the extra buybacks.
Dana had about 27,000 employees in 24 countries and reported 2025 sales of $7.5 billion.
Dana expects its special shareholder meeting on the Eaton Mobility deal on December 7, with fourth-quarter results due around mid-February.
Sources
- 8-K Filing — DANA Inc (DAN) — SEC EDGAR
- Exhibit d160614dex991.htm — DANA Inc 8-K exhibit — SEC EDGAR
