Investing.com — Dana Incorporated stock rallied more than 13% Friday after releasing preliminary FY24 financial results and 2025 guidance, alongside a business update showcasing organizational changes and cost-saving measures.
Preliminary FY24 sales were approximately $10.3 billion, slightly down from $10.6 billion in 2023, impacted by weaker demand for electric vehicles, commercial trucks, and off-highway equipment.
Adjusted EBITDA for the year reached $885 million, an 8.6% margin, up from 8.0% in 2023.
Despite challenges, CEO R. Bruce McDonald highlighted progress in cost efficiency, stating, “Dana is continuing to execute on our strategic plan to accelerate value creation… Our cost-savings actions are well underway, and we are pleased to increase our total cost reduction target to $300 million through 2026.”
Dana provided FY25 financial targets, projecting sales between $9.525 billion and $10.025 billion. Adjusted EBITDA is expected to rise to $925-$1,025 million, with an implied midpoint margin of 10%, driven by $175 million in cost savings and efficiency gains.
Free cash flow is forecasted at $175-$275 million, signaling operational improvement despite lower sales.
Additionally, Dana announced a simplified organizational structure, splitting its Power Technology segment into two divisions: Light Vehicle Systems and Commercial Vehicle Systems.
The move aligns with the company’s November 2024 announcement to sell its Off-Highway business, which could unlock shareholder value and reduce leverage.
“While the Company and its advisors believe there is strong interest in the business and an agreement may be announced by the reporting of first-quarter earnings, there can be no assurance that the sale process for Off-Highway will result in a transaction,” said the firm.
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