In recent trade, Dana Incorporated’s (NYSE: DAN) shares had a notable uptick, rising 13.61% to $15.03. This market response comes after the company released its fiscal year 2024 preliminary financial results and a strategic business update detailing cost-cutting and organizational reorganization initiatives.
Initial Financial Results for 2024 and Prospects for 2025
Dana announced preliminary unaudited full-year 2024 revenues of about $10.3 billion, with adjusted EBITDA coming in close to $885 million. At 8.6%, the adjusted EBITDA margin was stable and was expected to have improved by 60 basis points from the prior fiscal year.
These outcomes highlight the company’s continuous attempts to increase operational effectiveness, streamline its cost structure, and develop a more targeted business plan. The company’s management stressed its dedication to taking proactive steps to set Dana up for long-term success and value generation.
Initiatives for Cost Optimization and Strategic Realignment
A streamlined organizational structure and increased cost-cutting measures were among the strategic goals the corporation revealed. Through 2026, Dana has raised its overall cost reduction goal to $300 million.
The 2025 financial outlook reinforces the anticipated impact of these measures, which are expected to solidify Dana’s market leadership and enable it to capitalize on opportunities within traditional on-highway businesses while maintaining a prominent position in the electric vehicle transition.
Segment Restructuring and Off-Highway Business Sale
Changes to Dana’s reportable business divisions will take effect in the first quarter of 2025. With its OEM-facing activities merged into the Light Vehicle Drive Systems sector and its aftermarket business merged into the Commercial Vehicle Drive and Motion Systems division, the Power Technology section will be disbanded.
Light Vehicle Systems and Commercial Vehicle Systems will be the names of the reorganized divisions, respectively. The objectives of this realignment are to increase market penetration, optimize operations, and boost customer service effectiveness.
Additionally, the company reaffirmed its November 25, 2024, announcement that it will explore the sale of its Off-Highway division. Significant shareholder value is anticipated to be unlocked by this transaction, with the funds perhaps going toward strengthening the balance sheet by reducing debt and giving shareholders their money back.