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Will BorgWarner's (BWA) Q2 Earnings Disappoint Investors?
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BorgWarner Inc. (BWA - Free Report) is set to release its second-quarter 2016 results on Jul 28. Last quarter, the company posted a positive earnings surprise of 1.27%. Let’s see how things have shaped up for the forthcoming announcement.
Factors Influencing this Quarter
BorgWarner expects earnings per share for second-quarter 2016 to be in the range of 78–83 cents. Net sales growth for the second quarter is projected in the range of 10.6%–16%. Excluding the impact of foreign currencies and the Remy International buyout, the year-over-year increase in net sales for the quarter is expected in the range of 1.5%–4.8%. Moreover, a healthy balance sheet and ample cash flows help BorgWarner to return capital to shareholders. These efforts also positively impact earnings per share.
However, negative impact from foreign currencies poses concerns. The company projects a negative impact of 100–290 basis points on net sales related to foreign currencies in the second quarter.
Earnings Whispers
Our proven model does not conclusively show that BorgWarner is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here as you will see below:
Zacks ESP: The Earnings ESP represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate. BorgWarner’s Earnings ESP is -1.22% because the Most Accurate estimate stands at 81 cents, while the Zacks Consensus Estimate is pegged at 82 cents.
Zacks Rank: BorgWarner carries a Zacks Rank #4 (Sell). We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:
Westport Fuel Systems Inc. (WPRT - Free Report) has an Earnings ESP of +9.09% and a Zacks Rank #3. The company’s second-quarter 2016 financial results are expected to release on Aug 3.
Allison Transmission Holdings, Inc. (ALSN - Free Report) has an Earnings ESP of +6.35% and a Zacks Rank #3. The company’s second-quarter 2016 financial results are expected to release on Jul 27.
Visteon Corporation (VC - Free Report) has an Earnings ESP of +5.97% and a Zacks Rank #3. The company’s second-quarter 2016 results are expected to release on Jul 28.
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Will BorgWarner's (BWA) Q2 Earnings Disappoint Investors?
BorgWarner Inc. (BWA - Free Report) is set to release its second-quarter 2016 results on Jul 28. Last quarter, the company posted a positive earnings surprise of 1.27%. Let’s see how things have shaped up for the forthcoming announcement.
Factors Influencing this Quarter
BorgWarner expects earnings per share for second-quarter 2016 to be in the range of 78–83 cents. Net sales growth for the second quarter is projected in the range of 10.6%–16%. Excluding the impact of foreign currencies and the Remy International buyout, the year-over-year increase in net sales for the quarter is expected in the range of 1.5%–4.8%. Moreover, a healthy balance sheet and ample cash flows help BorgWarner to return capital to shareholders. These efforts also positively impact earnings per share.
However, negative impact from foreign currencies poses concerns. The company projects a negative impact of 100–290 basis points on net sales related to foreign currencies in the second quarter.
Earnings Whispers
Our proven model does not conclusively show that BorgWarner is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here as you will see below:
Zacks ESP: The Earnings ESP represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate. BorgWarner’s Earnings ESP is -1.22% because the Most Accurate estimate stands at 81 cents, while the Zacks Consensus Estimate is pegged at 82 cents.
Zacks Rank: BorgWarner carries a Zacks Rank #4 (Sell). We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
BORG WARNER INC Price and EPS Surprise
BORG WARNER INC Price and EPS Surprise | BORG WARNER INC Quote
Stocks to Consider
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:
Westport Fuel Systems Inc. (WPRT - Free Report) has an Earnings ESP of +9.09% and a Zacks Rank #3. The company’s second-quarter 2016 financial results are expected to release on Aug 3.
Allison Transmission Holdings, Inc. (ALSN - Free Report) has an Earnings ESP of +6.35% and a Zacks Rank #3. The company’s second-quarter 2016 financial results are expected to release on Jul 27.
Visteon Corporation (VC - Free Report) has an Earnings ESP of +5.97% and a Zacks Rank #3. The company’s second-quarter 2016 results are expected to release on Jul 28.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free report >>