BorgWarner Inc. (BWA - Free Report) reported adjusted earnings of 95 cents per share in third-quarter 2017, beating the Zacks Consensus Estimate of 87 cents. Adjusted earnings increased from 78 cents per share reported in the year-ago quarter.
Revenues increased 9.1% year over year to $2.42 million, surpassing the Zacks Consensus Estimate of $2.24 billion. Excluding the impact of foreign currencies and Remy International acquisition, net revenues increased 10.8% year over year.
Operating income amounted to $275.9 million, increasing from $150.3 million in the third quarter of 2016.
Segment Details
Revenues from the Engine segment increased to $1.51 billion from $1.4 billion in the prior-year quarter. Excluding the impact of foreign currencies, net sales rose 8.7% for the segment.
Revenues from the Drivetrain segment increased to $921.8 million in the third quarter from $865.9 million in the prior-year quarter. Excluding the impact of foreign currencies and the buyout of Remy International, net sales rallied 14.4% year over year.
Financial Position
BorgWarner had $414.3 million in cash as of Sep 30, 2017 compared with $443.7 million as of Dec 31, 2016.
As of Sep 30, 2017, long-term debt increased to $2.09 billion from $2.04 billion as of Dec 31, 2016.
In the nine months of 2017, net cash from operating activities increased to $624 million from $593 million in the first nine months of 2016.
In the nine months of 2017, capital expenditures, including tooling outlays, increased to $390 million from $355 million in the first nine months of 2016.
Outlook
For the fourth quarter, the company expects net earnings in the range of 99 cents to $1.01 per share. Moreover, it expects organic sales growth of 5-6.5% compared to net sales of $2.24 billion in the year-ago quarter.
For 2017, the company expects net sales of around $9.67-$9.70 billion against the previous expectation of $9.28-$9.38 billion, which translates into organic growth rate of 9-9.5%. The company expects positive impact of foreign currencies as a result of appreciation of euro of $37 million.
Further, BorgWarner expects net earnings in the range of $3.65-$3.70 per share against the previous expectation of $3.50-$3.60 per share in 2017.
BorgWarner currently has a Zacks Rank #2 (Buy).
A few better-ranked stocks in the auto space include PACCAR Inc (PCAR - Free Report) , Fox Factory Holding Corp (FOXF - Free Report) and Daimler AG .
While PACCAR sports a Zacks Rank #1 (Strong Buy), both Fox Factory Holding and Daimler carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
PACCAR, Fox Factory Holding and Daimler have a long-term expected earnings growth rate of 10%, 14.2%, and 2.8%, respectively.
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BorgWarner Inc. (BWA - Free Report) reported adjusted earnings of 95 cents per share in third-quarter 2017, beating the Zacks Consensus Estimate of 87 cents. Adjusted earnings increased from 78 cents per share reported in the year-ago quarter.
Revenues increased 9.1% year over year to $2.42 million, surpassing the Zacks Consensus Estimate of $2.24 billion. Excluding the impact of foreign currencies and Remy International acquisition, net revenues increased 10.8% year over year.
Operating income amounted to $275.9 million, increasing from $150.3 million in the third quarter of 2016.
Segment Details
Revenues from the Engine segment increased to $1.51 billion from $1.4 billion in the prior-year quarter. Excluding the impact of foreign currencies, net sales rose 8.7% for the segment.
Revenues from the Drivetrain segment increased to $921.8 million in the third quarter from $865.9 million in the prior-year quarter. Excluding the impact of foreign currencies and the buyout of Remy International, net sales rallied 14.4% year over year.
Financial Position
BorgWarner had $414.3 million in cash as of Sep 30, 2017 compared with $443.7 million as of Dec 31, 2016.
As of Sep 30, 2017, long-term debt increased to $2.09 billion from $2.04 billion as of Dec 31, 2016.
In the nine months of 2017, net cash from operating activities increased to $624 million from $593 million in the first nine months of 2016.
In the nine months of 2017, capital expenditures, including tooling outlays, increased to $390 million from $355 million in the first nine months of 2016.
Outlook
For the fourth quarter, the company expects net earnings in the range of 99 cents to $1.01 per share. Moreover, it expects organic sales growth of 5-6.5% compared to net sales of $2.24 billion in the year-ago quarter.
For 2017, the company expects net sales of around $9.67-$9.70 billion against the previous expectation of $9.28-$9.38 billion, which translates into organic growth rate of 9-9.5%. The company expects positive impact of foreign currencies as a result of appreciation of euro of $37 million.
Further, BorgWarner expects net earnings in the range of $3.65-$3.70 per share against the previous expectation of $3.50-$3.60 per share in 2017.
BorgWarner currently has a Zacks Rank #2 (Buy).
A few better-ranked stocks in the auto space include PACCAR Inc (PCAR - Free Report) , Fox Factory Holding Corp (FOXF - Free Report) and Daimler AG .
While PACCAR sports a Zacks Rank #1 (Strong Buy), both Fox Factory Holding and Daimler carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
PACCAR, Fox Factory Holding and Daimler have a long-term expected earnings growth rate of 10%, 14.2%, and 2.8%, respectively.
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>>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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