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BorgWarner (BWA) Beats on Q2 Earnings, Revises '16 View
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BorgWarner Inc. (BWA - Free Report) reported adjusted earnings of 84 cents per share in the second quarter of 2016, higher than 75 cents recorded in the year-ago quarter. Earnings per share also marginally surpassed the Zacks Consensus Estimate of 82 cents.
Including the impact of non-comparable items, BorgWarner recorded earnings of $164 million or 76 cents per share in second-quarter 2016, up from $148 million or 65 cents per share reported a year ago.
Revenues increased 14.6% year over year to $2.33 billion, coming in line with the Zacks Consensus Estimate. Excluding the impact of foreign currencies and the Remy International acquisition, net revenues went up 3.5% year over year.
Operating income increased to $269.4 million from $242.5 million in the second quarter of 2015. Adjusted operating income came in at $288 million, or 12.4% of net sales.
Revenues in the Engine segment improved 2.2% year over year to $1.44 billion. Excluding the impact of foreign currencies, net sales went up 2.8% in the segment.
Adjusted earnings before interest, income taxes and non-controlling interest (adjusted EBIT) improved to $234.8 million in the reported quarter from $228 million a year ago.
Revenues in the Drivetrain segment surged 42.7% to $895 million. Excluding the impact of foreign currencies and the Remy International acquisition, net sales rose 5.4% year over year. Adjusted EBIT improved to $92.8 million from $72.1 million in the second quarter of 2015.
Financial Position
BorgWarner had $495 million in cash as of Jun 30, 2016, compared with $577.7 million as of Dec 31, 2015. Total debt, including notes payable, was $2.63 billion as of Jun 30, 2016, compared with $2.55 billion as of Dec 31, 2015.
In first-half 2016, net cash from operating activities increased to $362 million from $319 million in the year-ago period. Capital expenditures, including tooling outlays, went down to $235 million from $285 million in the first half of 2015.
Outlook
Net sales growth for third-quarter 2016 is projected in the range of 13%–20.8%. Excluding the impact of foreign currencies and the Remy International buyout, the year-over-year increase in net sales for the third quarter is estimated in the range of 2.5%–7.7%.
Net earnings for the third quarter are projected in the band of 74–81 cents per share. The Remy International acquisition is expected to have a positive impact of 3 cents per share.
Operating income, as a percentage of net sales, is anticipated to be around 12% in third-quarter 2016. Excluding the impact of the Remy International buyout, operating margin is estimated to about 13%.
Net sales for 2016 are projected to grow 13.7%–17.5%, compared to the prior range of 12.7%–17.5%. Excluding the impact of foreign currencies and the Remy International acquisition, net sales are expected to grow around 3%–5.5%.
Further, BorgWarner expects net earnings in the range of $3.16–$3.32 per share in 2016, compared to the prior range of $3.11–$3.32. The Remy International acquisition is likely to have a positive impact of 12 cents per share.
Operating margin for 2016, excluding the impact of non-comparable items, is estimated to be over 12%. Excluding the impact of the Remy International acquisition, operating margin is expected to be higher than 13%.
BorgWarner currently carries a Zacks Rank #4 (Sell). Some better-ranked automobile stocks include Spartan Motors Inc. , Johnson Controls Inc. (JCI - Free Report) and Gentex Corp. (GNTX - Free Report) , each carrying a Zacks Rank #2 (Buy).
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BorgWarner (BWA) Beats on Q2 Earnings, Revises '16 View
BorgWarner Inc. (BWA - Free Report) reported adjusted earnings of 84 cents per share in the second quarter of 2016, higher than 75 cents recorded in the year-ago quarter. Earnings per share also marginally surpassed the Zacks Consensus Estimate of 82 cents.
Including the impact of non-comparable items, BorgWarner recorded earnings of $164 million or 76 cents per share in second-quarter 2016, up from $148 million or 65 cents per share reported a year ago.
Revenues increased 14.6% year over year to $2.33 billion, coming in line with the Zacks Consensus Estimate. Excluding the impact of foreign currencies and the Remy International acquisition, net revenues went up 3.5% year over year.
Operating income increased to $269.4 million from $242.5 million in the second quarter of 2015. Adjusted operating income came in at $288 million, or 12.4% of net sales.
Segment Details
Revenues in the Engine segment improved 2.2% year over year to $1.44 billion. Excluding the impact of foreign currencies, net sales went up 2.8% in the segment.
Adjusted earnings before interest, income taxes and non-controlling interest (adjusted EBIT) improved to $234.8 million in the reported quarter from $228 million a year ago.
Revenues in the Drivetrain segment surged 42.7% to $895 million. Excluding the impact of foreign currencies and the Remy International acquisition, net sales rose 5.4% year over year. Adjusted EBIT improved to $92.8 million from $72.1 million in the second quarter of 2015.
Financial Position
BorgWarner had $495 million in cash as of Jun 30, 2016, compared with $577.7 million as of Dec 31, 2015. Total debt, including notes payable, was $2.63 billion as of Jun 30, 2016, compared with $2.55 billion as of Dec 31, 2015.
In first-half 2016, net cash from operating activities increased to $362 million from $319 million in the year-ago period. Capital expenditures, including tooling outlays, went down to $235 million from $285 million in the first half of 2015.
Outlook
Net sales growth for third-quarter 2016 is projected in the range of 13%–20.8%. Excluding the impact of foreign currencies and the Remy International buyout, the year-over-year increase in net sales for the third quarter is estimated in the range of 2.5%–7.7%.
Net earnings for the third quarter are projected in the band of 74–81 cents per share. The Remy International acquisition is expected to have a positive impact of 3 cents per share.
Operating income, as a percentage of net sales, is anticipated to be around 12% in third-quarter 2016. Excluding the impact of the Remy International buyout, operating margin is estimated to about 13%.
Net sales for 2016 are projected to grow 13.7%–17.5%, compared to the prior range of 12.7%–17.5%. Excluding the impact of foreign currencies and the Remy International acquisition, net sales are expected to grow around 3%–5.5%.
Further, BorgWarner expects net earnings in the range of $3.16–$3.32 per share in 2016, compared to the prior range of $3.11–$3.32. The Remy International acquisition is likely to have a positive impact of 12 cents per share.
Operating margin for 2016, excluding the impact of non-comparable items, is estimated to be over 12%. Excluding the impact of the Remy International acquisition, operating margin is expected to be higher than 13%.
BORG WARNER INC Price, Consensus and EPS Surprise
BORG WARNER INC Price, Consensus and EPS Surprise | BORG WARNER INC Quote
Zacks Rank
BorgWarner currently carries a Zacks Rank #4 (Sell). Some better-ranked automobile stocks include Spartan Motors Inc. , Johnson Controls Inc. (JCI - Free Report) and Gentex Corp. (GNTX - Free Report) , each carrying a Zacks Rank #2 (Buy).
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 >>