DCH earnings analysis
What we found in DCH's 10-Q: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
Dauch delivered strong reported growth in Q2 2026 following the Dowlais acquisition, with revenue up 92.4% year over year to $2,955.6 million and operating margin recovering to 3.4% from negative 1.4% in Q1. However, gross and operating margins remained below the prior-year levels, EPS was only $0.00 versus $0.32, and six-month operating cash flow declined to $43.1 million. Liquidity is substantial at $2.5 billion, but higher interest expense, tariff exposure, acquisition-related costs and weak cash conversion temper the outlook.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Acquisition Drove Strong Revenue Growth
- Q2 revenue increased 92.4% year over year to $2,955.6 million, primarily reflecting approximately $1,439 million of acquired Dowlais sales. Revenue also increased approximately 24.2% sequentially from $2.38 billion in Q1 2026.
- Sequential Margin Recovery
- Gross margin improved to 11.4% from 9.5% in Q1 2026, but declined from 13.1% in Q2 2025. Operating margin improved from negative 1.4% in Q1 to 3.4% in Q2, while remaining below 3.6% a year earlier.
- Both Segments Expanded
- Driveline sales rose to $2,225.0 million from $1,107.2 million year over year, while Metal Forming sales rose to $861.7 million from $545.0 million. Segment Adjusted EBITDA increased to $389.6 million from $202.1 million.
- EPS Reached Break-Even
- Diluted EPS improved from a $(0.52) loss in Q1 2026 to $0.00 in Q2, but declined from $0.32 in Q2 2025. Q2 net income attributable to Dauch was only $1.0 million versus $39.3 million a year earlier.
- Substantial Liquidity Cushion
- The company reported approximately $2.5 billion of liquidity at June 30, including $881 million of cash, $1.5 billion of available revolver capacity and $100.0 million under non-U.S. facilities. Management stated these resources should be sufficient for debt service, capital expenditures, R&D and working capital needs.
- Cash Flow Remained Constrained
- Six-month operating cash flow was $43.1 million versus $147.8 million in the prior-year period, while capital expenditures rose to $201.9 million from $126.6 million. The filing does not report free cash flow as a defined measure; operating cash flow less capex was approximately negative $158.8 million.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- Tariff Exposure Remains Material
- Tariffs reduced earnings by approximately $30 million in the first six months of 2026 versus $10 million for full-year 2025. Management anticipates a $10 million to $20 million 2026 earnings impact after mitigation and customer recoveries, but states the actual impact could differ materially.
- Higher Debt Service Burden
- Interest expense increased to $89.8 million in Q2 from $43.1 million a year earlier, and the weighted-average long-term debt rate increased to 7.1% from 6.7%. Management expects full-year 2026 interest expense of $340 million to $360 million.
- Integration Costs Pressure Earnings
- The Business Combination generated $148.7 million of restructuring and acquisition-related costs in the first six months, including $57 million of acquisition costs and $45 million of integration expenses. Management expects an additional $60 million to $70 million of acquisition-related costs and $100 million to $120 million of integration costs during 2026.
- Weak Cash Conversion
- Operating cash flow fell to $43.1 million from $147.8 million year over year, with approximately $38 million of adverse impact from accounts receivable changes and $53 million from accounts payable and accrued expense changes. Cash payments already totaled $76 million for restructuring, $147 million for acquisition-related costs and $36 million for integration activities.
- Labor Disruption Risk
- The company experienced an UAW work stoppage at a U.S. manufacturing facility in June 2026 and incurred approximately $8 million of one-time costs. Although a new four-year agreement was ratified, labor disruption remains an operating risk.
- High OEM Customer Concentration
- Sales concentration remains significant: GM represented approximately 30% of consolidated sales in the first six months of 2026, while Stellantis and Ford represented approximately 13% and 11%, respectively. A production reduction at a major customer could therefore materially affect volumes and cash flow.
What they reported.
What the company itself reported, taken out of the document.
- Earnings per share
- $0.0
- Gross margin
- 11.4%
- Operating margin
- 3.4%
- Segment
- Driveline: $2,225.0 million in Q2 2026 versus $1,107.2 million in Q2 2025, up 100.9%; six-month sales were $3,994.1 million versus $2,094.2 million.
- Segment
- Metal Forming: $861.7 million in Q2 2026 versus $545.0 million in Q2 2025, up 58.1%; six-month sales were $1,587.9 million versus $1,070.5 million.
- Segment
- Consolidated net sales: $2,955.6 million in Q2 2026 versus $1,536.2 million in Q2 2025; eliminations were $(131.1) million versus $(116.0) million.
What they said about what is next.
The 10-Q does not provide or update numeric revenue or EPS guidance; the prior 8-K disclosed full-year 2026 revenue guidance of $10.3 billion to $10.8 billion. Quantitative outlook items in the 10-Q include 2026 interest expense of $340 million to $360 million, capital spending of 4.5% to 5.0% of sales, tariff earnings impact of $10 million to $20 million, and total restructuring charges of $90 million to $120 million.
The filing reads about the same as the one before it.
What came before.
- 10-Q · May 8, 2026
- Dauch Corporation reported Q1 2026 net sales of $2.38 billion, significantly exceeding the prior year's $1.41 billion, reflecting a 68.6% increase. However, the company experienced a net loss of $100.3 million,…
- 10-K · February 13, 2026
- Dauch completed the transformational acquisition of Dowlais (issue of ~117 million shares for ~ $1.7 billion) and ended 2025 with $5,836.7 million of net sales but a net loss of $19.7 million (diluted EPS $(0.17)).…
- 10-K · February 14, 2025
- AAM reported modest revenue growth to $6,124.9 million in 2024 with marked margin recovery: gross margin rose to 12.1% and operating income increased to $241.4 million. The company generated positive free cash flow…
- 10-Q · May 3, 2024
- AAM reported Q1 revenue of $1,606.9 million, up $113.0 million (7.6%) year-over-year, with gross margin improving to 12.4% and operating income rising to $77.0 million (4.8% margin). The company produced net income of…
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
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