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What's in Store for BorgWarner (BWA) This Earnings Season?
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BorgWarner Inc. (BWA - Free Report) is set to release second-quarter 2018 earnings on Jul 26, before the market opens. In the last reported quarter, the company delivered a positive earnings surprise of 6.8%. It surpassed expectations in all the trailing four quarters, with an average beat of 7.2%.
In the past three months, shares of BorgWarner have underperformed the industry it belongs to. The stock has declined 15.2% compared with the industry’s decrease of 2.9% during the period.
Let’s see how things are shaping up for the upcoming announcement.
For second-quarter 2018, BorgWarner expects net earnings to be $1.09-$1.11 per share compared with $1 recorded in the prior-year quarter. Further, it expects organic net sales growth of 5-7% compared with the prior expectation of 3-5.5%.
The company frequently adds new products to its portfolio to boost sales. With increased sales volume growth of hybrid and electric vehicles in China, BorgWarner aims to offer products that will meet the demands of the region. In April, the company showcased its broad product portfolio for combustion, hybrid and electric vehicles. These new technologies will enable automakers to combat challenges of the evolving auto technologies. Additionally, BorgWarner collaborates with other companies to offer its range of products.
In June, the company also opened a new 100,000-square-feet technical center in Noblesville, IN. With rising customer demand, this center will help BorgWarner to strengthen its research and development capabilities and help in augmenting the company’s hybrid and electric product portfolio.
Ample cash flow aids BorgWarner in returning capital to its shareholders through quarterly dividend payments. In April, the company’s board declared a quarterly cash dividend of 17 cents per share.
However, the company’s stock has seen the Zacks Consensus Estimate for annual earnings being revised 0.2% downward over the past seven days.
Also, high debt, rising capital expenditure and pressure from OEMs (Original Equipment Manufacturers) to reduce process are a few concerns for BorgWarner.
Earnings Whispers
Our proven model does not conclusively show that BorgWarner is likely to beat on earnings this quarter. This is because, a stock needs to have both a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. But that is not the case here as you will see below.
Earnings ESP: BorgWarner has an Earnings ESP of 0.00% as both the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at $1.11. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: BorgWarner currently carries a Zacks Rank #3. Further, this, combined with its Earnings ESP, makes the surprise prediction difficult. Note that we caution against Rank #4 and 5 (Sell-rated) stocks going into the earnings announcement, especially, when the company is witnessing negative estimate revisions.
Stocks to Consider
Here are a few stocks worth considering from the same space, with the right combination of elements to outpace earnings estimates this time around:
Cummins Inc. (CMI - Free Report) has an Earnings ESP of +1.28% and a Zacks Rank #3. The company’s second-quarter 2018 financial results are scheduled to release on Jul 31.
Oshkosh Corporation (OSK - Free Report) has an Earnings ESP of +2.85% and has a Zacks Rank of 2. The company is scheduled to report third-quarter fiscal 2018 results on Jul 31.
American Axle & Manufacturing Holdings, Inc. (AXL - Free Report) has an Earnings ESP of +0.89% and a Zacks Rank #2. Its second-quarter 2018 results are expected to release on Aug 3.
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Image: Bigstock
What's in Store for BorgWarner (BWA) This Earnings Season?
BorgWarner Inc. (BWA - Free Report) is set to release second-quarter 2018 earnings on Jul 26, before the market opens. In the last reported quarter, the company delivered a positive earnings surprise of 6.8%. It surpassed expectations in all the trailing four quarters, with an average beat of 7.2%.
In the past three months, shares of BorgWarner have underperformed the industry it belongs to. The stock has declined 15.2% compared with the industry’s decrease of 2.9% during the period.
Let’s see how things are shaping up for the upcoming announcement.
BorgWarner Inc. Price and EPS Surprise
BorgWarner Inc. Price and EPS Surprise | BorgWarner Inc. Quote
Factors to Consider
For second-quarter 2018, BorgWarner expects net earnings to be $1.09-$1.11 per share compared with $1 recorded in the prior-year quarter. Further, it expects organic net sales growth of 5-7% compared with the prior expectation of 3-5.5%.
The company frequently adds new products to its portfolio to boost sales. With increased sales volume growth of hybrid and electric vehicles in China, BorgWarner aims to offer products that will meet the demands of the region. In April, the company showcased its broad product portfolio for combustion, hybrid and electric vehicles. These new technologies will enable automakers to combat challenges of the evolving auto technologies. Additionally, BorgWarner collaborates with other companies to offer its range of products.
In June, the company also opened a new 100,000-square-feet technical center in Noblesville, IN. With rising customer demand, this center will help BorgWarner to strengthen its research and development capabilities and help in augmenting the company’s hybrid and electric product portfolio.
Ample cash flow aids BorgWarner in returning capital to its shareholders through quarterly dividend payments. In April, the company’s board declared a quarterly cash dividend of 17 cents per share.
However, the company’s stock has seen the Zacks Consensus Estimate for annual earnings being revised 0.2% downward over the past seven days.
Also, high debt, rising capital expenditure and pressure from OEMs (Original Equipment Manufacturers) to reduce process are a few concerns for BorgWarner.
Earnings Whispers
Our proven model does not conclusively show that BorgWarner is likely to beat on earnings this quarter. This is because, a stock needs to have both a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. But that is not the case here as you will see below.
Earnings ESP: BorgWarner has an Earnings ESP of 0.00% as both the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at $1.11. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: BorgWarner currently carries a Zacks Rank #3. Further, this, combined with its Earnings ESP, makes the surprise prediction difficult. Note that we caution against Rank #4 and 5 (Sell-rated) stocks going into the earnings announcement, especially, when the company is witnessing negative estimate revisions.
Stocks to Consider
Here are a few stocks worth considering from the same space, with the right combination of elements to outpace earnings estimates this time around:
Cummins Inc. (CMI - Free Report) has an Earnings ESP of +1.28% and a Zacks Rank #3. The company’s second-quarter 2018 financial results are scheduled to release on Jul 31.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Oshkosh Corporation (OSK - Free Report) has an Earnings ESP of +2.85% and has a Zacks Rank of 2. The company is scheduled to report third-quarter fiscal 2018 results on Jul 31.
American Axle & Manufacturing Holdings, Inc. (AXL - Free Report) has an Earnings ESP of +0.89% and a Zacks Rank #2. Its second-quarter 2018 results are expected to release on Aug 3.
Looking for Stocks With Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>