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BorgWarner's (BWA) Q3 Earnings Drive Past Estimates, Up Y/Y
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BorgWarner Inc. (BWA - Free Report) has delivered adjusted earnings of $1 per share in third-quarter 2018, beating the Zacks Consensus Estimate of 99 cents. The figure also increased from 95 cents per share in the year-ago quarter. Net earnings rose to $204 million from the prior-year quarter figure of $185 million.
BorgWarner’s revenues rose 2.6% year over year to $2.48 billion. The Zacks Consensus Estimate was $2.45 billion. The acquisition of Sevcon contributed $19 million to net sales.
In the reported quarter, operating income amounted to $278 million compared with the prior-year figure of $274.6 million.
Revenues from the Engine segment increased to $1.52 billion from $1.51 billion in the prior-year quarter. Excluding impacts of foreign currencies and Sevcon acquisition, the segment’s net sales rose 2.1%. Adjusted EBIT (earnings before interest, income taxes and non-controlling interest) was $238 million. Excluding impacts of foreign currencies and the Sevcon acquisition, the figure was $243 million, marking an increase of 2.3% from the year-ago quarter.
At the Drivetrain segment, revenues increased to $977 million in the third quarter from $922 million in the prior-year quarter. Excluding impacts of foreign currencies and the Sevcon acquisition, net sales rallied 6.3% year over year. Adjusted EBIT was $108 million. Excluding impacts of foreign currencies and the Sevcon acquisition, the figure was $114 million, marking an increase of 2.1% from the prior-year quarter.
Financial Position
BorgWarner had $361.8 million in cash as of Sep 30, 2018, compared with $545.3 million as of Dec 31, 2017. Long-term debt was $2.1 billion, almost in line with the figure recorded as of Dec 31, 2017.
At the end of nine months of 2018, net cash provided by operating activities was $556.3 million compared with $624 million in the prior-year period. During the nine-month period, capital expenditure, including tooling outlays, increased to $394.3 million from $389.7 million in the same period of 2017.
Outlook
For fourth-quarter 2018, the company envisions net earnings per share of $1.07-$1.12. Moreover, it anticipates net organic sales growth of 1.0-4.5% compared with net sales of $2.6 billion in the year-ago quarter.
For 2018, the company reiterated its guidance for organic growth. BorgWarner projects net sales of $10.49-$10.58 billion, which implies organic growth of 4.5-5.5%. Currency fluctuations and the Sevcon acquisition are anticipated to contribute $192 million and $57 million, respectively, to yearly sales.
Further, the company projects net earnings of $4.35-$4.40.
CarMax has an expected long-term growth rate of 3.3%. Over the past six months, shares of the company have moved up 9.7%.
Allison Transmission has an expected long-term growth rate of 10%. Over the past three months, shares of the company have moved up 4.7%.
Advance Auto has an expected long-term growth rate of 12.3%. Shares of the company have risen 12.3% over the past three months.
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BorgWarner's (BWA) Q3 Earnings Drive Past Estimates, Up Y/Y
BorgWarner Inc. (BWA - Free Report) has delivered adjusted earnings of $1 per share in third-quarter 2018, beating the Zacks Consensus Estimate of 99 cents. The figure also increased from 95 cents per share in the year-ago quarter. Net earnings rose to $204 million from the prior-year quarter figure of $185 million.
BorgWarner’s revenues rose 2.6% year over year to $2.48 billion. The Zacks Consensus Estimate was $2.45 billion. The acquisition of Sevcon contributed $19 million to net sales.
In the reported quarter, operating income amounted to $278 million compared with the prior-year figure of $274.6 million.
BorgWarner Inc. Price, Consensus and EPS Surprise
BorgWarner Inc. Price, Consensus and EPS Surprise | BorgWarner Inc. Quote
Segment Details
Revenues from the Engine segment increased to $1.52 billion from $1.51 billion in the prior-year quarter. Excluding impacts of foreign currencies and Sevcon acquisition, the segment’s net sales rose 2.1%. Adjusted EBIT (earnings before interest, income taxes and non-controlling interest) was $238 million. Excluding impacts of foreign currencies and the Sevcon acquisition, the figure was $243 million, marking an increase of 2.3% from the year-ago quarter.
At the Drivetrain segment, revenues increased to $977 million in the third quarter from $922 million in the prior-year quarter. Excluding impacts of foreign currencies and the Sevcon acquisition, net sales rallied 6.3% year over year. Adjusted EBIT was $108 million. Excluding impacts of foreign currencies and the Sevcon acquisition, the figure was $114 million, marking an increase of 2.1% from the prior-year quarter.
Financial Position
BorgWarner had $361.8 million in cash as of Sep 30, 2018, compared with $545.3 million as of Dec 31, 2017. Long-term debt was $2.1 billion, almost in line with the figure recorded as of Dec 31, 2017.
At the end of nine months of 2018, net cash provided by operating activities was $556.3 million compared with $624 million in the prior-year period. During the nine-month period, capital expenditure, including tooling outlays, increased to $394.3 million from $389.7 million in the same period of 2017.
Outlook
For fourth-quarter 2018, the company envisions net earnings per share of $1.07-$1.12. Moreover, it anticipates net organic sales growth of 1.0-4.5% compared with net sales of $2.6 billion in the year-ago quarter.
For 2018, the company reiterated its guidance for organic growth. BorgWarner projects net sales of $10.49-$10.58 billion, which implies organic growth of 4.5-5.5%. Currency fluctuations and the Sevcon acquisition are anticipated to contribute $192 million and $57 million, respectively, to yearly sales.
Further, the company projects net earnings of $4.35-$4.40.
Zacks Rank and Stocks to Consider
BorgWarner currently carries a Zacks Rank #3 (Hold). A few better-ranked stocks in the auto space are CarMax, Inc. (KMX - Free Report) , Allison Transmission Holdings, Inc. (ALSN - Free Report) and Advance Auto Parts, Inc. (AAP - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
CarMax has an expected long-term growth rate of 3.3%. Over the past six months, shares of the company have moved up 9.7%.
Allison Transmission has an expected long-term growth rate of 10%. Over the past three months, shares of the company have moved up 4.7%.
Advance Auto has an expected long-term growth rate of 12.3%. Shares of the company have risen 12.3% over the past three months.
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>>