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BorgWarner (BWA) to Post Q2 Earnings: What's in the Offing?
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BorgWarner (BWA - Free Report) is slated to release second-quarter 2020 results on Aug 5, before the opening bell. The Zacks Consensus Estimate for the quarter’s loss is pegged at 47 cents per share on revenues of $1.17 billion.
This automotive equipment supplier posted better-than-expected results in the last reported quarter, mainly driven by the robust performance of the Engine segment. BorgWarner beat estimates in each of the trailing four quarters, the average surprise being 18.64%. This is depicted in the graph below:
The Zacks Consensus Estimate for BorgWarner’s second-quarter loss per share has moved down a cent to 47 cents in the past month. This also compares unfavorably with the year-ago quarter’s $1 per share. The Zacks Consensus Estimate for revenues also suggests a year-over-year plunge of 53.96%.
Factors to Consider
BorgWarner’s expansion efforts, product launches, strategic collaborations and solid backlog are likely to have aided its second-quarter performance. However, the company’s sales volumes might have declined on industry headwinds. Heightening coronavirus fears are likely to have thwarted vehicle demand, in turn dampening demand for automotive equipment.
Notably, the Zacks Consensus Estimate for the Engine segment’s quarterly pretax loss is pinned at $14.85 million, as against the prior-year quarter’s profit of $249 million. The consensus estimate for the segment’s quarterly net sales is pegged at $665 million, down from the year-ago quarter’s $1.57 billion.
The Zacks Consensus Estimate for its Drivetrain segment’s quarterly net sales is pegged at $391 million, calling for a significant decline from the $998 million reported in the year-ago quarter. The consensus estimate for the segment’s pretax loss is pegged at $111 million comparing unfavourably with the profit of $102 million witnessed in the prior-year period.
Decline in light-vehicle production across all major markets served, along with unfavorable foreign-currency translation impact, are likely to have dented its margins to some extent.
What the Zacks Model Says
Our proven model does not conclusively predict an earnings beat for BorgWarner this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. However, that is not the case here as elaborated below. You can see the complete list of today’s Zacks #1 Rank stocks here.
Earnings ESP: BorgWarner has an Earnings ESP of -14.34%. This is because the Most Accurate Estimate of loss of 53 cents comes in 6 cents higher than the Zacks Consensus Estimate of loss of 47 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: BorgWarner carries a Zacks Rank of 3 currently.
Stocks to Consider
Here are a few stocks worth considering, as these have the right combination of elements to come up with an earnings beat this time around:
Tenneco Inc. has an Earnings ESP of +0.04% and carries a Zacks Rank #3 at present. The company is slated to release second-quarter 2020 earnings on Aug 5.
Carvana Co. (CVNA - Free Report) has an Earnings ESP of +5.95% and carries a Zacks Rank #3 at present. The company is scheduled to report quarterly numbers on Aug 5.
Adient plc (ADNT - Free Report) has an Earnings ESP of +17.22% and carries a Zacks Rank #3 at present. The company is set to release earnings results on Aug 6.
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Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
Image: Bigstock
BorgWarner (BWA) to Post Q2 Earnings: What's in the Offing?
BorgWarner (BWA - Free Report) is slated to release second-quarter 2020 results on Aug 5, before the opening bell. The Zacks Consensus Estimate for the quarter’s loss is pegged at 47 cents per share on revenues of $1.17 billion.
This automotive equipment supplier posted better-than-expected results in the last reported quarter, mainly driven by the robust performance of the Engine segment. BorgWarner beat estimates in each of the trailing four quarters, the average surprise being 18.64%. This is depicted in the graph below:
BorgWarner Inc. Price and Consensus
BorgWarner Inc. price-consensus-chart | BorgWarner Inc. Quote
Which Way are the Estimates Headed?
The Zacks Consensus Estimate for BorgWarner’s second-quarter loss per share has moved down a cent to 47 cents in the past month. This also compares unfavorably with the year-ago quarter’s $1 per share. The Zacks Consensus Estimate for revenues also suggests a year-over-year plunge of 53.96%.
Factors to Consider
BorgWarner’s expansion efforts, product launches, strategic collaborations and solid backlog are likely to have aided its second-quarter performance. However, the company’s sales volumes might have declined on industry headwinds. Heightening coronavirus fears are likely to have thwarted vehicle demand, in turn dampening demand for automotive equipment.
Notably, the Zacks Consensus Estimate for the Engine segment’s quarterly pretax loss is pinned at $14.85 million, as against the prior-year quarter’s profit of $249 million. The consensus estimate for the segment’s quarterly net sales is pegged at $665 million, down from the year-ago quarter’s $1.57 billion.
The Zacks Consensus Estimate for its Drivetrain segment’s quarterly net sales is pegged at $391 million, calling for a significant decline from the $998 million reported in the year-ago quarter. The consensus estimate for the segment’s pretax loss is pegged at $111 million comparing unfavourably with the profit of $102 million witnessed in the prior-year period.
Decline in light-vehicle production across all major markets served, along with unfavorable foreign-currency translation impact, are likely to have dented its margins to some extent.
What the Zacks Model Says
Our proven model does not conclusively predict an earnings beat for BorgWarner this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. However, that is not the case here as elaborated below. You can see the complete list of today’s Zacks #1 Rank stocks here.
Earnings ESP: BorgWarner has an Earnings ESP of -14.34%. This is because the Most Accurate Estimate of loss of 53 cents comes in 6 cents higher than the Zacks Consensus Estimate of loss of 47 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: BorgWarner carries a Zacks Rank of 3 currently.
Stocks to Consider
Here are a few stocks worth considering, as these have the right combination of elements to come up with an earnings beat this time around:
Tenneco Inc. has an Earnings ESP of +0.04% and carries a Zacks Rank #3 at present. The company is slated to release second-quarter 2020 earnings on Aug 5.
Carvana Co. (CVNA - Free Report) has an Earnings ESP of +5.95% and carries a Zacks Rank #3 at present. The company is scheduled to report quarterly numbers on Aug 5.
Adient plc (ADNT - Free Report) has an Earnings ESP of +17.22% and carries a Zacks Rank #3 at present. The company is set to release earnings results on Aug 6.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
See 8 breakthrough stocks now>>