Dana Incorporated Announces Preliminary Earnings Results for the Full Year Ended December 31, 2017; Provides Earnings Guidance for the Year 2018; Revises Earnings Guidance for the Year 2019
January 17, 2018 at 12:00 pm
Share
Dana Incorporated announced preliminary earnings results for the full year ended December 31, 2017. For the year, the company's sales approximated $7.2 billion, about 24% higher than 2016, primarily due to strong end-market demand, acquisitions, conversion of sales backlog, and favorable currency. Adjusted EBITDA approximated $835 million, or 11.6% of sales, a 30 basis-point improvement over 2016. The primary driver of the top line growth was indeed organic.
For the year 2018, the company expects sales to be approximately $7.6 billion, which represents a $400 million or nearly 6% increase over last year. They expect profit to grow by $100 million, which represents a 12% growth over the prior year, achieving a margin of 12.3%, which is an expansion of 70 basis points over the prior year. They expect their diluted adjusted EPS to grow by $0.35 a share, aided by about a $0.10 increase associated with savings in the U.S. tax law changes which recently occurred. Adjusted EBITDA to be $910 million to $960 million, adjusted EBITDA as a percentage of sales of 12.1% to 12.5%, operating cash flow of approximately 7.5% of sales, capital spending of approximately 4.0% of sales; and free cash flow of approximately 3.5% of sales.
For the year 2019, the company expects sales to be about $7.9 billion, representing a $700 million increase from the guidance that they provided for 2019 about a year ago. And they do expect to be able to achieve $3 of diluted adjusted EPS by 2019, which is about a $0.40 increase compared to what they had highlighted over a year ago. They do expect profit to top $1 billion, achieving the 12.8% margin targets that they set out over a year ago, and that represents about a $90 million improvement over what they had previously. And they remain convicted that their cash flow will achieve a level of 5% of sales by next year on a free cash flow basis as they have these major program launches moved behind them and they're positioned to be able to get CapEx to a more consistent level going forward as well as the incremental profit contribution. Adjusted EBITDA margin and free cash flow as a percentage of sales are expected to remain in line with prior target ranges at 12.8% and 5.0%. Adjusted EBITDA is expected to increase by $90 million, compared with the prior 2019 target ranges, due to the impact of stronger than expected end-market demand, increased sales backlog, and continued cost discipline. On a diluted or on an adjusted EBITDA perspective, they expect over nearly $360 million of profit growth and over 200 basis points of margin expansion as they move from about 10.8% to 12.8% over this period.
Dana Incorporated is engaged in providing power-conveyance and energy-management solutions for vehicles and machinery. The Company's portfolio improves the efficiency, performance, and sustainability of light vehicles, commercial vehicles, and off-highway equipment. It offers axles, driveshafts, transmissions, sealing and thermal products to electrifications products including motors, inverters, controllers, e-sealing, e-thermal and digital solutions. The Company operates through four segments: Light Vehicle Drive Systems, Commercial Vehicle Drive and Motion Systems, Off-Highway Drive and Motion Systems, and Power Technologies. The Company owns and have licensed trademarks, such as Spicer Electrified, Victor Reinz, Long, Graziano and Dana TM4. The Company operates in North America, Europe, South America and Asia Pacific regions. Its North America includes Canada, Mexico and United States of America. Its Europe regions include Belgium, Netherlands, Germany and Hungary.
Dana Incorporated Announces Preliminary Earnings Results for the Full Year Ended December 31, 2017; Provides Earnings Guidance for the Year 2018; Revises Earnings Guidance for the Year 2019