Dana's CFO Says Eaton Must Get Comfortable Before Buybacks Restart After The Deal Closes
Timing of the decision is "fluid," Dana's finance chief said, after the company raised its 2026 buyback target to $469 million.
Dana Chief Financial Officer Timothy Kraus said on the company's third-quarter earnings call Wednesday that whether the auto supplier can resume share buybacks once its Eaton Mobility deal closes is up to Eaton: "the decision is really they need to be comfortable with it."
Eaton holds the decision
Dana, which makes axles, driveshafts and transmissions for on-highway vehicles, is talking with Eaton about a plan that would allow repurchases after closing, Kraus said, calling the discussions
The fallback if buybacks stay frozen
Kraus said Dana would keep its regular dividend and could pay special dividends after the deal. If it cannot restart buybacks for 24 months after closing, it would use the cash to pay down debt.
He said Dana would finish its $2 billion authorization in 2029 either way, with a substantial amount of repurchases that year if it cannot restart sooner.
Dana shares fell 9.04% to $24.74 in Wednesday trading, as of 10:06 a.m. ET, for a market value of $2.9 billion.
Buybacks before the close
CEO Byron Foster said Dana raised its 2026 repurchase target to $469 million. It bought back 6.6 million shares for $200 million in the third quarter, bringing the year to $369 million, with $100 million left to complete this year. Program to date, Dana is at $1.02 billion of the $2 billion authorization.
The Eaton Mobility deal, a tax-free split-off structured as a reverse Morris Trust, is on track to close around the end of the first quarter of 2027, Foster said. One regulatory approval remains outstanding, and a special shareholder meeting is expected December 7. Net leverage is expected at 1.6 times, including the extra $100 million of buybacks.
The quarter behind the call
Third-quarter sales rose $121 million to $2.038 billion, and adjusted EBITDA rose $56 million to $218 million, a 10.7% margin. Diluted adjusted earnings per share were 41 cents, against a loss of 4 cents a year earlier. The company reported a $10 million loss from continuing operations, citing higher tax expense and a $24 million loss on redeeming its 2031 euro notes.
Dana raised its full-year sales outlook to about $7.8 billion at the midpoint, up $50 million, and held adjusted EBITDA at about $825 million. Kraus pointed to energy and freight inflation as pressures he is working to recover from customers.
Dana expects to hold its special shareholder meeting on December 7 and to report fourth-quarter results in mid-February.
Sources
- Dana slips as earnings miss overshadows higher margins (DAN:NYSE) | Seeking Alpha — seekingalpha.com
- Dana Incorporated (DAN) Stock Price, News, Quote & History - Yahoo Finance — Yahoo Finance
- 3 EV Supply Chain Stocks Facing The China Threat In US Manufacturing — Yahoo Finance
- Dana Incorporated Reports Strong Third-Quarter Results; Eaton Mobility Transaction on Track; Increases Share Repurchases — prnewswire.com
