Welcome to Dana Incorporated's earnings call for the second quarter of 2025. I guess I'd sort of characterize the second quarter as another quarter of the Dana team delivering on our commitments with a solid Q2 beat, double-digit margins, and accelerating free cash flow. Right now, we have some headwind here in the second quarter, about 80 basis points. We need to make them go away so that we don't impact end vehicle demand.
In terms of our profit guide, and here I'm referring only to new Dana, we're upping our profits guidance for the year by $35 million. On a free cash flow basis, we're upping our target by $50 million to about $275 million at the midpoint of our guidance. Our guidance, and as we've talked at the end of the first quarter, we had indicated our sales were trending towards the higher end of our previous range. In terms of the guidance for the two parts of the business, if you think about the original guide at $975 million, you can kind of see the split.
Our revised guidance that I touched on in my previous slide, up $35 million for new Dana, down $20 million for off-highway for a net positive $15 million. The net effect of the higher sales and increased stranded costs is to temporarily lower the profit margin of continuing operations until the sale closes and transition service payments begin. Finally, cash flow is the one metric that will include off-highway as we had previously. Since the sale transaction excludes cash, all cash flow will remain with Dana until closing.
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