Dana Inc.'s third-quarter net income rose 17 percent to $111 million on lower tax expenses, but the supplier cut its full-year sales and its adjusted EBITDA outlook because of demand volatility in its off-highway business and slowing growth in some global regions.
Sales in the third quarter were up 9 percent to $2.16 billion. The company attributed the rise to recent acquisitions, including Nordresa, and a focus on "cost discipline," despite lower market demand for heavy vehicles in Europe, India and China. Adjusted earnings before interest, taxes, depreciation and amortization for the third quarter rose to $250 million, compared with $240 million in the same period of 2018.
"We idled production and took necessary steps to adjust our conversion costs to align with our customer demand," CEO James Kamsickas said during a conference call Wednesday.
The company said it continues to add new business, announcing it secured contracts with Valeo and Lonestar Specialty Vehicles in the third quarter.
Adjusted free cash flow more than tripled to $125 million from $34 million in the third quarter of 2018 on higher earnings combined with lower cash taxes, the company said.
Dana said it now expects full-year sales of $8.55 billion to $8.85 billion, down from its previous range of $8.95 billion to $9.35 billion. Its adjusted EBITDA outlook for 2019 was lowered to $1 billion to $1.07 billion from a previous range of $1.085 billion to $1.165 billion.
"While we fully expect Dana to deliver continued sales and profit growth in 2019 for a third consecutive year, we have made necessary adjustments to our guidance due to recent demand volatility in our off-highway markets, as well as slowing economic growth in India and China," CFO Jonathan Collins said in a statement.
Dana, of Maumee, Ohio, ranks No. 33 on the Automotive News Europe list of top 100 global suppliers with parts sales to automakers of $8.14 billion in its fiscal 2018. Nearly one-third of that total, 31 percent, came from Europe.