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BorgWarner (BWA) Q4 Earnings Miss Estimates, Decline Y/Y
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BorgWarner Inc. (BWA - Free Report) reported adjusted earnings of 90 cents per share for fourth-quarter 2023, down from $1.26 recorded in the prior-year quarter. The bottom line also missed the Zacks Consensus Estimate of 93 cents.
The automotive equipment supplier reported net sales of $3.52 billion, missing the Zacks Consensus Estimate of $3.61 billion. The top line declined 14.4% year over year.
Air Management: Net sales totaled $1.88 billion in the reported quarter compared with $1.81 billion in the year-ago period. However, it missed our estimate of $1.91 billion. Adjusted operating income of $287 million rose from $280 million recorded in the year-ago quarter but lagged our estimate of $296.9 million.
Drivetrain & Battery Systems: Net sales totaled $1.13 billion in the reported quarter compared with $990 million in the year-ago period, but missed our projection of $1.15 billion. Adjusted operating income of $145 million increased from $119 million recorded in the year-ago quarter and topped our estimate of $133.1 million.
e-Propulsion: Sales from the segment were $542 million, down from $545 million a year ago and lagging our estimate of $571.9 million. The segment incurred an adjusted operating loss of $16 million, down from the operating profit of $1 million in the corresponding period of 2022 but narrower than our estimate of a loss of $18.8 million.
Financial Position
As of Dec 31, BorgWarner had $1.53 billion in cash/cash equivalents/restricted cash compared with $1.08 billion as of Dec 31, 2022. As of Dec 31, long-term debt was $3.71 billion, down from $4.14 billion recorded on Dec 31, 2022.
Net cash provided in operating activities from continuing operations was $887 million in the quarter under review. Capital expenditures and free cash flow totaled $208 million and $679 million, respectively.
2024 Guidance
For full-year 2024, the company anticipates net sales within $14.4-$14.9 billion, up from $14.2 reported in 2023.
The adjusted operating margin is expected in the band of 8.5-8.9%. Adjusted earnings are estimated to be within $3.65-$4 per share. Operating cash is likely to be in the range of $1,325-$1,375 million. Free cash flow is projected in the band of $475-$575 million.
The company expects its 2024 eProduct sales to be in the range of $2.5-$2.8 billion, up from approximately $2 billion in 2023.
The Zacks Consensus Estimate for HMC’s 2024 sales and earnings implies year-over-year growth of 14.8% and 37.3%, respectively. The EPS estimates for 2024 and 2025 have moved up 16 cents and 22 cents, respectively, in the past 30 days.
The Zacks Consensus Estimate for OSK’s 2024 sales and earnings suggests year-over-year growth of 6.7% and 4%, respectively. The EPS estimates for 2024 and 2025 have improved 2 cents and 25 cents, respectively, in the past seven days.
The Zacks Consensus Estimate for MOD’s 2024 sales and earnings suggests year-over-year growth of 4% and 67.2%, respectively. The EPS estimates for 2024 and 2025 have improved 22 cents each in the past seven days.
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BorgWarner (BWA) Q4 Earnings Miss Estimates, Decline Y/Y
BorgWarner Inc. (BWA - Free Report) reported adjusted earnings of 90 cents per share for fourth-quarter 2023, down from $1.26 recorded in the prior-year quarter. The bottom line also missed the Zacks Consensus Estimate of 93 cents.
The automotive equipment supplier reported net sales of $3.52 billion, missing the Zacks Consensus Estimate of $3.61 billion. The top line declined 14.4% year over year.
BorgWarner Inc. Price, Consensus and EPS Surprise
BorgWarner Inc. price-consensus-eps-surprise-chart | BorgWarner Inc. Quote
Segmental Performance
Air Management: Net sales totaled $1.88 billion in the reported quarter compared with $1.81 billion in the year-ago period. However, it missed our estimate of $1.91 billion. Adjusted operating income of $287 million rose from $280 million recorded in the year-ago quarter but lagged our estimate of $296.9 million.
Drivetrain & Battery Systems: Net sales totaled $1.13 billion in the reported quarter compared with $990 million in the year-ago period, but missed our projection of $1.15 billion. Adjusted operating income of $145 million increased from $119 million recorded in the year-ago quarter and topped our estimate of $133.1 million.
e-Propulsion: Sales from the segment were $542 million, down from $545 million a year ago and lagging our estimate of $571.9 million. The segment incurred an adjusted operating loss of $16 million, down from the operating profit of $1 million in the corresponding period of 2022 but narrower than our estimate of a loss of $18.8 million.
Financial Position
As of Dec 31, BorgWarner had $1.53 billion in cash/cash equivalents/restricted cash compared with $1.08 billion as of Dec 31, 2022. As of Dec 31, long-term debt was $3.71 billion, down from $4.14 billion recorded on Dec 31, 2022.
Net cash provided in operating activities from continuing operations was $887 million in the quarter under review. Capital expenditures and free cash flow totaled $208 million and $679 million, respectively.
2024 Guidance
For full-year 2024, the company anticipates net sales within $14.4-$14.9 billion, up from $14.2 reported in 2023.
The adjusted operating margin is expected in the band of 8.5-8.9%. Adjusted earnings are estimated to be within $3.65-$4 per share. Operating cash is likely to be in the range of $1,325-$1,375 million. Free cash flow is projected in the band of $475-$575 million.
The company expects its 2024 eProduct sales to be in the range of $2.5-$2.8 billion, up from approximately $2 billion in 2023.
Zacks Rank & Key Picks
BWA currently carries a Zacks Rank #3 (Hold).
Some better-ranked players in the auto space are Honda Motor Co., Ltd. (HMC - Free Report) , Oshkosh Corporation (OSK - Free Report) and Modine Manufacturing Company (MOD - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for HMC’s 2024 sales and earnings implies year-over-year growth of 14.8% and 37.3%, respectively. The EPS estimates for 2024 and 2025 have moved up 16 cents and 22 cents, respectively, in the past 30 days.
The Zacks Consensus Estimate for OSK’s 2024 sales and earnings suggests year-over-year growth of 6.7% and 4%, respectively. The EPS estimates for 2024 and 2025 have improved 2 cents and 25 cents, respectively, in the past seven days.
The Zacks Consensus Estimate for MOD’s 2024 sales and earnings suggests year-over-year growth of 4% and 67.2%, respectively. The EPS estimates for 2024 and 2025 have improved 22 cents each in the past seven days.