Dana Incorporated Shares Lost 11% Since Q4 Report
Dana Incorporated (NYSE:DAN) shares lost around 11% since Tuesday’s close following the company’s worse-than-expected Q4 results. Quarterly EPS came in at $0.18, missing the Street estimate of $0.21, while revenue of $2.27 billion was slightly better than the Street estimate of $2.17 billion.
According to the analysts at Deutsche Bank, the company’s soft 2022 margin guidance despite solid expected top-line growth reflects steep pressure from cost inflation and EV investments, consistent with the outlook outlined by most auto suppliers this season.
However, unlike most of its peers, the company’s outlook assumes moderation in commodities pricing later in 2022, and embeds a small net tailwind from raw materials.
The analysts lowered their 2022 Revenue/EBITDA estimates from $9.70 billion/$1 billion to $9.83 billion/$917 million (9.3% margin vs. 10.3% prior), and EPS from $2.80 to $2.15, towards the low-end of company guidance, to reflect expected cost headwinds.
| Symbol | Price | %chg |
|---|---|---|
| ASII.JK | 4800 | 0 |
| MASA.JK | 5425 | 0 |
| 012330.KS | 227000 | 0 |
| AUTO.JK | 1970 | 0 |
Dana Shares Plummet 17% Following Q4 Report
Dana Incorporated (NYSE:DAN) shares plunged more than 17% on Tuesday after the company reported its Q4 results, with EPS of ($0.10) coming in worse than the Street estimate of $0.24. Revenue was $2.56 billion, above the Street estimate of $2.51 billion.
The company expects fiscal 2023 EPS to be in the range of $0.25-$0.75, compared to the Street estimate of $0.73. Full-year revenue is expected in the range of $10.35-10.85 billion, versus the Street estimate of $10.11 billion.
According to the analysts at Deutsche Bank, the strong negative reaction to the company’s earnings announcement reflects not only the weaker margin outlook for 2023 but also investors’ realization that net inflationary costs and heightened EV spending could drag on profitability and free cash flow at least until mid-decade.
The company’s newly initiated 2023 guidance and mid-decade target call for an EBITDA margin range of 7.2%-7.8% and approximately 9%, respectively, which are significantly below the previous 12% mid-term margin target issued in 2019.
