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BorgWarner (BWA) Beats on Q2 Earnings & Sales, Ups '21 View

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BorgWarner Inc. (BWA - Free Report) reported adjusted earnings of $1.08 per share for second-quarter 2021, beating the Zacks Consensus Estimate of 79 cents and turning around from the year-ago loss of 14 cents. Higher-than-anticipated revenues across all segments resulted in the outperformance.

This automotive equipment supplier reported net sales of $3,758 million, outpacing the Zacks Consensus Estimate of $3,483 million. Further, the top-line figure increased a whopping 163.5% from the year-ago quarter’s $1,426 million, thanks to the Delphi Technologies buyout and increased demand for products.

Segmental Performance

Air Management: Net sales totaled $1,854 million for the reported quarter compared with $826 million registered in the year-ago period. The sales figure also topped the Zacks Consensus Estimate of $1,686 million. Adjusted EBIT of $277 million compared favorably with the year-ago period’s $28 million amid higher sales and restructuring efforts.

e-Propulsion & Drivetrain: Sales from the segment came in at $1,337 million, jumping from $607 million in second-quarter 2020. The sales figure also surpassed the Zacks Consensus Estimate of $1,289 million. The segment generated adjusted EBIT of $132 million for second-quarter 2021 compared with $1 million recorded in the corresponding period of 2020.

Fuel Injection: Sales and adjusted EBIT from the segment totaled $480 million and $38 million, respectively. The sales figure topped the Zacks Consensus Estimate of $473 million. Adjusted EBIT margin for the quarter was 7.9%.

Aftermarket: Sales and adjusted EBIT from the segment totaled $226 million and $32 million, respectively. The sales figure outpaced the Zacks Consensus Estimate of $200 million. Adjusted EBIT margin for the quarter came in at 14.2%.

Financial Position

As of Jun 30, 2021, BorgWarner — whose peers include Magna International (MGA - Free Report) , Meritor  and Autoliv (ALV - Free Report) — had $1,553 million in cash compared with $1,650 million on Dec 31, 2020. For the June-end quarter, long-term debt was $4,348 million, up from $3,738 million recorded on Dec 31, 2020. Net cash provided by operating activities was $280 million for the second quarter. Investment in capital expenditure, including tooling outlays, was $147 million.

View Raised

For full-year 2021, the Zacks Rank #3 (Hold) company now anticipates net sales within $15.2-$15.6 billion, up from the previous guided range of $14.8-$15.4 billion. Adjusted operating margin and net earnings are expected in the band of 10.2-10.5% and $4.15-$4.40 per share, higher than the earlier guidance of 10.1-10.5% and $3.42-$3.92, respectively. Free cash flow is projected between $800 million and $900 million. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.


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