Dana(US:DAN)2025-10-29 14:00Financial Performance - Sales for Q3 2025 were $1.917 billion, an increase of $20 million year-over-year, driven by currency benefits despite lower demand [11][12] - Adjusted EBITDA improved to $162 million, up $51 million from the previous year, with a margin expansion of 260 basis points to 8.5% due to cost-saving actions [11][12] - Net income attributable to Dana was $13 million, a positive swing of $34 million compared to a loss of $21 million in Q3 of last year [12] Business Line Performance - Volume and mix negatively impacted sales by $66 million, primarily due to lower demand in commercial vehicle markets, partially offset by higher sales in light vehicles [13] - Cost savings contributed $73 million to profit, with a total of $183 million achieved to date, and an increased target of $235 million for the full year [14][19] Market Performance - Commercial vehicle demand in North America continues to deteriorate, with no signs of recovery expected until mid-2026 [29][30] - Light vehicle demand remains stable, with production disruptions having minimal impact on sales [9][10] Company Strategy and Industry Competition - The company is on track to close the off-highway divestiture in Q4 2025, with most regulatory approvals received [6][10] - The company plans to return $600 million to shareholders this year, having repurchased nearly 30 million shares, or over 20% of shares outstanding [7][22] Management Commentary on Operating Environment and Future Outlook - Management expressed confidence in achieving a full-year sales target of approximately $7.4 billion and an adjusted EBITDA of about $590 million [17][18] - The company anticipates a margin improvement in continuing operations, with a target of 10% to 10.5% margins for 2026 [22][23] Other Important Information - Adjusted free cash flow for Q3 was $101 million, a $109 million improvement year-over-year, driven by higher profitability and lower working capital requirements [15][16] - The company expects to recover $10 million in costs related to EV program cancellations in Q4 [64][68] Q&A Session Summary Question: Impact of tariff policy changes on U.S. OEMs - Management noted that U.S. OEMs are likely benefiting more from recent tariff policy changes compared to European counterparts due to their higher production in the U.S. [26][27] Question: Deterioration in commercial vehicle market - Management indicated no signs of recovery in the commercial vehicle market, expecting a soft market through mid-2026 [29][30] Question: Drivers of fourth-quarter performance - Management highlighted continued cost-saving initiatives and improved product mix as key drivers for expected performance in Q4 [32][33] Question: Performance of pricing improvements - Pricing improvements are driven by new platforms and effective negotiations with customers, contributing significantly to profit [40][42] Question: Backlog and EV cancellations - Management confirmed that the backlog has been impacted by EV program cancellations, but there are still increases in ICE programs expected [100][102]