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,…
Earnings analysis · 10-Q
DCH earnings analysis
Filed August 7, 2026 · Our reading of the company's report
The latest report
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,…
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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.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $0.0
What stood out
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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.
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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.
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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.
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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.
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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.
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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.
What to watch
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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.
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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.
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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.
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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.
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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.
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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.
Management's outlook
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.
Earlier filings 4
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 itself. Analysis can contain errors; check the source document for full context.