Although Dana Inc. missed out on a major acquisition in the year’s first quarter, the Maumee-based automotive parts supplier still turned in a stellar performance that saw major jumps in both revenue and profits.
On Monday, the company reported net sales of $2.1 billion in the year’s first quarter, up 26 percent from the same period last year. Company officials also said that represented the company’s best quarterly revenue figure in nearly a decade.
First quarter profits, meanwhile, rose 44 percent to $108 million, or 73 cents per share. In the first quarter of 2017, Dana reported profits of $75 million, or 51 cents per share. The quarterly results were slightly better than analysts’ expectations.
“We continue to see strong demand in our core light truck programs and we expect it to continue this year,” Dana President and Chief Executive Officer Jim Kamsickas said on a conference call with Wall Street analysts. “Our off-highway and commercial vehicle end markets also remain very strong and were key drivers of our raised full-year guide this year.”
In March, Dana updated its guidance for 2018 sales to be in the range of $7.9 billion, a $150 million increase from its initial guidance. Officials also said at that time adjusted earnings per share should be in the range of $2.90, a 15 cent increase over the company’s original forecast. The company reaffirmed that guidance on Monday.
The financial results reported Monday were the first since Dana lost out on a whirlwind $6.1 billion bid to buy the driveline division of British aerospace and automotive parts supplier GKN PLC. Had that deal gone through, the combined company would have had 65,000 employees and annual sales of more than $14 billion.
Ultimately, though, GKN shareholders elected to take an $11.4 billion takeover offer from Melrose Industries, a London-based turnaround specialist that GKN’s board had unsuccessfully sought to block.
On Monday, Mr. Kamsickas repeated that the company believed the attempted acquisition of GKN was a good one — though not something Dana needed to continue on its growth trajectory.
“That was the definition of opportunistic,” he said of the acquisition attempt. “It wasn’t even really on the radar. If the Dana team wasn’t as talented and capable as they were, we wouldn’t have been able to react as fast as we did.”
Mr. Kamsickas also said nothing has changed for the company going forward, in terms of its own strategy or in terms of its appetite for other acquisitions.
“We keep our eyes open in that regard, but we are very much in a position of strength,” he said, adding the company doesn’t have a “deep need” of making a major purchase, nor would it be willing to overpay or make a highly leveraged purchase.
Shares of Dana fell about 5 percent on Monday to close at $23.73.
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