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What's in the Cards for BorgWarner (BWA) in Q1 Earnings?
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BorgWarner Inc. (BWA - Free Report) is set to release its first-quarter 2017 results before the market opens on Apr 27. Last quarter, the company posted a positive earnings surprise of 1.19%. It has delivered a positive surprise in each of the trailing four quarters, with an average of 1.55%. Let’s see how things have shaped up for the forthcoming announcement.
Factors Influencing this Quarter
BorgWarner expects first-quarter 2017 earnings per share to be in the range of 81–85 cents, higher than the 80 cents earned in the first-quarter 2016. Organic net sales growth for the quarter is projected in the range of 2.5–6.5%. 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 2.5–6.5%. Moreover, a healthy balance sheet and ample cash flow will help BorgWarner to return capital to shareholders. These efforts are likely to impact earnings per share positively.
BorgWarner is focused on expanding its business through new business, restructuring initiatives and restructuring activities. Completion of the restructuring of the Drivetrain segment at the end of 2015 has led to enhanced profitability. The company believes that this restructuring will enhance the Drivetrain division's competitive position along with its business prospects further. In addition, ramp-up of the North American program, which had adversely affected Drivetrain’s sales earlier, will benefit the company’s results. It is expected that this improvement, along with benefits from the European restructuring, will boost Drivetrain’s margins.
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: Earnings ESP represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate. BorgWarner’s Earnings ESP is 0.00% because the Most Accurate estimate as well as the Zacks Consensus Estimate are pegged at 84 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 #2 which increases the predictive power of ESP. However, the company’s 0.00% ESP makes surprise prediction difficult.
We caution against Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Price Performance
BorgWarner underperformed the Zacks categorized Auto/Truck Original Equipment industry over the last three months. The company’s shares lost 4.3% in the period, compared with a 2.6% decline of the industry.
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:
Ferrari N.V. (RACE - Free Report) has an Earnings ESP of +3.77% and a Zacks Rank #3. The company’s first-quarter 2017 financial results are expected to release on May 4.
General Motors Company (GM - Free Report) has an Earnings ESP of +3.5% and a Zacks Rank #3. The company is scheduled to report first-quarter 2017 financial numbers on Apr 28.
More Stock News: This Is Bigger than the iPhone!
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What's in the Cards for BorgWarner (BWA) in Q1 Earnings?
BorgWarner Inc. (BWA - Free Report) is set to release its first-quarter 2017 results before the market opens on Apr 27. Last quarter, the company posted a positive earnings surprise of 1.19%. It has delivered a positive surprise in each of the trailing four quarters, with an average of 1.55%. Let’s see how things have shaped up for the forthcoming announcement.
Factors Influencing this Quarter
BorgWarner expects first-quarter 2017 earnings per share to be in the range of 81–85 cents, higher than the 80 cents earned in the first-quarter 2016. Organic net sales growth for the quarter is projected in the range of 2.5–6.5%. 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 2.5–6.5%. Moreover, a healthy balance sheet and ample cash flow will help BorgWarner to return capital to shareholders. These efforts are likely to impact earnings per share positively.
BorgWarner is focused on expanding its business through new business, restructuring initiatives and restructuring activities. Completion of the restructuring of the Drivetrain segment at the end of 2015 has led to enhanced profitability. The company believes that this restructuring will enhance the Drivetrain division's competitive position along with its business prospects further. In addition, ramp-up of the North American program, which had adversely affected Drivetrain’s sales earlier, will benefit the company’s results. It is expected that this improvement, along with benefits from the European restructuring, will boost Drivetrain’s margins.
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: Earnings ESP represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate. BorgWarner’s Earnings ESP is 0.00% because the Most Accurate estimate as well as the Zacks Consensus Estimate are pegged at 84 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 #2 which increases the predictive power of ESP. However, the company’s 0.00% ESP makes surprise prediction difficult.
We caution against Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Price Performance
BorgWarner underperformed the Zacks categorized Auto/Truck Original Equipment industry over the last three months. The company’s shares lost 4.3% in the period, compared with a 2.6% decline of the industry.
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:
Visteon Corporation (VC - Free Report) has an Earnings ESP of +5.8% and a Zacks Rank #1. The company will release its first-quarter 2017 results on Apr 27. You can see the complete list of today’s Zacks #1 Rank stocks here.
Ferrari N.V. (RACE - Free Report) has an Earnings ESP of +3.77% and a Zacks Rank #3. The company’s first-quarter 2017 financial results are expected to release on May 4.
General Motors Company (GM - Free Report) has an Earnings ESP of +3.5% and a Zacks Rank #3. The company is scheduled to report first-quarter 2017 financial numbers on Apr 28.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020. Click here for the 6 trades >>