Dana (DAN) Q2 2024 earnings summary

Executive summary

• Q2 2024 sales were $2.74 billion, nearly flat year-over-year, with adjusted EBITDA of $244 million, supported by efficiency improvements and stable demand in most end markets despite inflation and EV development costs.

• Net income for Q2 was $16 million ($0.11 per share), down from $30 million last year, mainly due to restructuring and a $29–$30 million loss from the planned divestiture of the non-core European hydraulics business.

• Free cash flow for Q2 was $104 million, $30 million lower year-over-year due to working capital timing, but full-year FCF guidance was raised by 33% to $100 million.

• Company continues to benefit from new business wins and market share gains in commercial vehicles, offsetting some softness in EV and off-highway markets.

• Gross margin declined to 9.3% from 9.9% year-over-year, impacted by higher inflationary costs, warranty expense, and increased electrification spending.

Financial highlights

• Q2 2024 sales: $2,738 million (down $10 million year-over-year); H1 2024 sales: $5,473 million (up $81 million year-over-year).

• Adjusted EBITDA: $244 million in Q2 (8.9% margin, up 10 bps); H1 $467 million (8.5% margin, up 20 bps).

• Net income: $16 million in Q2; $19 million H1 (down from $58 million last year).

• Operating cash flow: $215 million in Q2; $113 million H1 (up $27 million year-over-year).

• Free cash flow: $104 million in Q2 (down $30 million year-over-year); capital spending $11 million lower than last year.

Outlook and guidance

• 2024 sales guidance revised to $10.45–$10.95 billion, reflecting lower EV and traditional market demand.

• Adjusted EBITDA guidance is $875–$975 million (implied margin ~8.6%), up $80 million from prior guide.

• Free cash flow guidance raised to $100 million midpoint (up $125 million from prior year), with capital spending reduced.

• Diluted adjusted EPS guidance reintroduced at $0.80–$1.30; GAAP EPS guidance $0.60.

• Lower EV sales expected to be a headwind, but efficiency improvements and lower capital spending drive margin and FCF growth.