Dana’s capital structure softens on revised 2021 EBITDA guidance — Market React

Dana equity and debt weakened after the auto parts supplier lowered full-year EBITDA guidance for FY21 due in part to rising commodity inflation.

The company now estimates FY21 adjusted EBITDA to total USD 815m to USD 875m, with a margin of roughly 9.5%, compared to previous guidance of USD 920m to USD 1bn with a margin of 10.5% to 11%, according to a press release.

Adjusted free cash flow is now expected to be roughly 1% of sales, compared to previous guidance of 3% of sales.

Dana also tightened sales guidance to USD 8.8bn to USD 9bn from USD 8.5bn to USD 9bn.

The lowered guidance for FY21 comes despite earnings traction in 2Q21.

For the quarter ended 30 September, the company posted revenue of USD 2.2bn, compared to USD 1.99bn for the same period last year, driven by strong customer demand in its heavy-vehicle markets. This compared to street estimates of USD 2.09bn.

Adjusted EBITDA for the quarter totaled USD 210m, compared to USD 201m in 3Q20. Dana also endured profit margin compression in the latest three-month period, primarily driven by raw material cost inflation.

Dana’s equity traded today at USD 22.37 per share and a USD 3.303bn market cap, down 11.16% from yesterday’s close.

The USD 400m 5.625% senior unsecured notes due 2028 traded today at 105.888 to yield 3.567%, compared to trades at 107 to yield 2.918% yesterday, according to MarketAxess.

2021 Debtwire

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