Dauch hails progress on synergy post-Dowlais buy as ups sales guidance

Dauch Corp on Friday cut its adjusted earnings guidance for 2026 while expecting higher sales as it reported a stark increase in net sales but also in costs during the third quarter.

The Detroit, Michigan-based producer of driveline products and systems, formerly known as American Axle & Manufacturing Holdings, said it turned to a net loss of USD44.6 million in the third quarter of 2026, from a profit of USD9.2 million a year prior. Pretax loss widened to USD30.7 million from USD1.7 million.

However, adjusted earnings before interest, tax, depreciation and amortisation surged 83% to USD358.5 million from USD195.7 million.

Gross profit jumped 49% to USD282.2 million from USD189.0 million.

Dauch in February closed its £1.16 billion acquisition of Dowlais, a London-based automotive engineering firm which had been spun out of Melrose Industries PLC back in 2023.

Dauch highlighted that its takeover of Dowlais "was the primary driver" of year-over-year changes in financial results.

Adjusted free cash flow climbed 29% to USD126.7 million from USD98.1 million.

Chief Executive Officer & Chair David Dauch said: "We generated strong cash flow in the quarter while supporting new program launches. At the same time, we are making excellent progress on synergy realization, and we remain focused on delivering long-term value for our stakeholders."

Net sales jumped 93% to USD2.91 billion from USD1.51 billion, while cost of goods sold increased 99% to USD2.63 billion from USD1.32 billion. Interest expense more than doubled to USD86.6 million from USD42.7 million.

Further, it incurred other costs of USD35.9 million, compared to other income of USD2.0 million a year prior.

For 2026, the company expects sales between USD10.8 billion and USD10.88 billion, revised up from prior guidance of between USD10.6 billion and USD10.8 billion.

It anticipates adjusted Ebitda between USD1.35 billion and USD1.38 billion, lower than prior guidance of between USD1.36 billion and USD1.43 billion.

Further, Dauch expects adjusted free cash flow between USD270 million and USD310 million in 2026, revised from between USD260 million and USD325 million.

Dauch shares fell 0.3% to 339.16 pence each on Friday afternoon in London.

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