BorgWarner Inc. (BWA - Free Report) delivered adjusted earnings of 96 cents per share in third-quarter 2019, beating the Zacks Consensus Estimate of 85 cents. This was mainly driven by revenue growth in the Drivetrain segment which amounted to $993 million, outpacing the Zacks Consensus Estimate of $964 million. However, the earnings per share came in lower than the $1 recorded in the year-ago quarter. Net income amounted to $194 million compared with the $204 million reported in the prior-year quarter.
BorgWarner’s net sales inched up 0.6% year over year to $2.49 billion, which beat the Zacks Consensus Estimate of $2.38 billion. The reported figure, however, fell nearly $66 million year over year, due to foreign currency fluctuations.
In the third quarter, operating income amounted to $276 million compared with the prior-year quarter’s figure of $278 million.
Segmental Performance
Net sales in the Engine segment fell to $1,514million fromthe prior-year quarter’s $1,516 million. Excluding impact of foreign-currency translation and divestiture of the thermostat product line, net sales went up4.6% year over year and adjusted EBIT (earnings before interest, income taxes and non-controlling interest) inched up 1.26% to $241 million. This was primarily aided by higher revenuesand the net impactof acquisitions and divestitures.
In the Drivetrain segment, net sales increased to $993 million from the $976 million reported in the prior-year quarter. Excluding impacts of foreign currencies, net sales were up 4.2% on a year-over-year basis and adjusted EBIT fell 7.4% to $100 million due to higher amount spent on research and development andstart-up costs for launches.
Financial Position
As of Sep 30, 2019, BorgWarner had $916 million in cash compared with $739 million as of Dec 31, 2018. Long-term debt was $1.66 billion, down from the $1.94 billion recorded at the end of 2018. The debt-to-capital ratio stands at 31.2%.
Net cash provided by operating activities was $824 million as of Sep 30, 2019 compared with $556 million as of Sep 30, 2018. Investment in capital expenditure, including tooling outlays, declined to $346 million from $394 million recorded as of Sep 30, 2018.
Outlook
For full-year 2019, the company’s net organic sales are likely to be down 1% to flat, with an estimated range of $9.95-$10.1 billion. Further, it envisions adjusted net earnings between $3.85 and $4 per diluted share. Further, adjusted operating margin is expected in the range of 11.7-12% and full-year free cash flow is estimated between $550 million and $600million.
Zacks Rank & Stocks to Consider
BorgWarner currently carries a Zacks Rank #3 (Hold).
A few better-ranked stocks include Kinross Gold Corporation (KGC - Free Report) , sporting a Zacks Rank #1 (Strong Buy), and Aaron's, Inc. (AAN - Free Report) and Alamos Gold Inc. (AGI - Free Report) , both carrying a Zacks Rank #2 (Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Kinross Gold has an expected earnings growth rate of 210% for 2019. The company’s shares have soared 85.3% in the past year.
Aaron's has an estimated earnings growth rate of 17.56% for the ongoing year. The company’s shares have surged roughly 62.6% in a year’s time.
Alamos Gold has a projected earnings growth rate of a whopping 340% for the current year. Its shares have gained around 27% over the past year.
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BorgWarner Inc. (BWA - Free Report) delivered adjusted earnings of 96 cents per share in third-quarter 2019, beating the Zacks Consensus Estimate of 85 cents. This was mainly driven by revenue growth in the Drivetrain segment which amounted to $993 million, outpacing the Zacks Consensus Estimate of $964 million. However, the earnings per share came in lower than the $1 recorded in the year-ago quarter. Net income amounted to $194 million compared with the $204 million reported in the prior-year quarter.
BorgWarner’s net sales inched up 0.6% year over year to $2.49 billion, which beat the Zacks Consensus Estimate of $2.38 billion. The reported figure, however, fell nearly $66 million year over year, due to foreign currency fluctuations.
In the third quarter, operating income amounted to $276 million compared with the prior-year quarter’s figure of $278 million.
Segmental Performance
Net sales in the Engine segment fell to $1,514million fromthe prior-year quarter’s $1,516 million. Excluding impact of foreign-currency translation and divestiture of the thermostat product line, net sales went up4.6% year over year and adjusted EBIT (earnings before interest, income taxes and non-controlling interest) inched up 1.26% to $241 million. This was primarily aided by higher revenuesand the net impactof acquisitions and divestitures.
In the Drivetrain segment, net sales increased to $993 million from the $976 million reported in the prior-year quarter. Excluding impacts of foreign currencies, net sales were up 4.2% on a year-over-year basis and adjusted EBIT fell 7.4% to $100 million due to higher amount spent on research and development andstart-up costs for launches.
Financial Position
As of Sep 30, 2019, BorgWarner had $916 million in cash compared with $739 million as of Dec 31, 2018. Long-term debt was $1.66 billion, down from the $1.94 billion recorded at the end of 2018. The debt-to-capital ratio stands at 31.2%.
Net cash provided by operating activities was $824 million as of Sep 30, 2019 compared with $556 million as of Sep 30, 2018. Investment in capital expenditure, including tooling outlays, declined to $346 million from $394 million recorded as of Sep 30, 2018.
Outlook
For full-year 2019, the company’s net organic sales are likely to be down 1% to flat, with an estimated range of $9.95-$10.1 billion. Further, it envisions adjusted net earnings between $3.85 and $4 per diluted share. Further, adjusted operating margin is expected in the range of 11.7-12% and full-year free cash flow is estimated between $550 million and $600million.
Zacks Rank & Stocks to Consider
BorgWarner currently carries a Zacks Rank #3 (Hold).
A few better-ranked stocks include Kinross Gold Corporation (KGC - Free Report) , sporting a Zacks Rank #1 (Strong Buy), and Aaron's, Inc. (AAN - Free Report) and Alamos Gold Inc. (AGI - Free Report) , both carrying a Zacks Rank #2 (Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Kinross Gold has an expected earnings growth rate of 210% for 2019. The company’s shares have soared 85.3% in the past year.
Aaron's has an estimated earnings growth rate of 17.56% for the ongoing year. The company’s shares have surged roughly 62.6% in a year’s time.
Alamos Gold has a projected earnings growth rate of a whopping 340% for the current year. Its shares have gained around 27% over the past year.
Free: Zacks’ Single Best Stock Set to Double
Today you are invited to download our just-released Special Report that reveals 5 stocks with the most potential to gain +100% or more in 2020. From those 5, Zacks Director of Research, SherazMian hand-picks one to have the most explosive upside of all.
This pioneering tech ticker had soared to all-time highs and then subsided to a price that is irresistible. Now a pending acquisition could super-charge the company’s drive past competitors in the development of true Artificial Intelligence. The earlier you get in to this stock, the greater your potential gain.
Download Free Report Now >>
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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