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BorgWarner (BWA) to Report Q1 Earnings: What's in Store?
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BorgWarner (BWA - Free Report) is slated to release first-quarter 2024 results on May 2, before market open. The Zacks Consensus Estimate for the to-be-reported quarter’s earnings per share and revenues is pegged at 87 cents and $3.53 billion, respectively.
For the first quarter, the consensus estimate for BWA’s earnings per share has moved down a penny in the past seven days. Its bottom-line estimates imply a decline of 20.18% from the year-ago reported number. The Zacks Consensus Estimate for its quarterly revenues suggests a year-over-year decline of 15.47%.
Over the trailing four quarters, BWA surpassed earnings estimates on two occasions and missed twice, the average surprise being 4.84%. This is depicted in the graph below:
In the fourth quarter of 2023, BWA reported adjusted earnings per share of 90 cents, down from $1.26 recorded in the prior-year quarter. The bottom line missed the consensus mark of 93 cents.
The company reported net sales of $3.52 billion, missing the Zacks Consensus Estimate of $3.61 billion. The top line also decreased 14.4% year over year.
Things to Note
The acquisition of the charging business of SSE in China expanded BorgWarner's footprint beyond Europe and North America, while the buyout of Eldor Corporation’s Electric Hybrid System business has further enhanced BWA’s electric product portfolio. Contracts from XPeng, a global OEM and a major Chinese OEM are expected to drive the company’s top-line growth. Acquisitions and frequent business wins are likely to have bolstered the company’s performance in the to-be-reported quarter.
BorgWarner is likely to benefit from the soaring popularity of EVs and expects hybrid and electric technologies to be its major revenue drivers. It expects its 2024 eProduct sales in the band of $2.5-$2.8 billion, implying year-over-year growth of 25-40%. The expected rise in eProduct sales in 2024 is likely to have boosted the company’s top-line growth in the to-be-reported quarter.
On the flip side, per S&P Global Mobility, global light vehicle production in 2024 is expected to decline 0.4% year over year to 89.4 million units. The decrease in production is likely to have hurt the demand for BorgWarner’s offerings, which might have negatively impacted BWA’s first-quarter results.
BorgWarner has been bearing the brunt of high SG&A costs over the past several quarters. This trend is expected to have continued in the to-be-reported quarter. Rising costs might have weighed on the company’s margin in the first quarter.
Here's a sneak peek at the firm’s revenues and EBIT projections for the to-be-reported quarter.
Our estimate for BorgWarner’s Air Management segment’s first-quarter sales is pinned at $2.05 billion, suggesting a rise from $1.98 billion reported in the year-ago quarter. EBIT from the segment is estimated at $300.3 million, indicating a rise from $284 million recorded in the year-ago quarter.
For the first quarter, our forecast for the Drivetrain & Battery Systems segment is pegged at $1.02 billion, suggesting a rise from the $956 million registered in the year-ago quarter. Also, the segmental EBIT estimate of $126.2 million indicates an increase from $113 million generated in the first quarter of 2023.
Our forecast for the ePropulsion segment is pinned at $542 million, suggesting a rise from the $487 million registered in the year-ago quarter. Our estimate for loss before interest and taxes is pegged at $23.3 million compared with the loss of $35 million registered in the first quarter of 2023.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for BorgWarner in the to-be-reported quarter, as it does not have the right combination of the two key ingredients. A combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is not the case here, as stated below.
Earnings ESP: BWA has an Earnings ESP of -1.27%. This is because the Most Accurate Estimate is pegged lower than the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: BorgWarner currently carries a Zacks Rank #3.
Earnings Whispers for Other Auto Stocks
Lucid Group, Inc. (LCID - Free Report) has an Earnings ESP of -8.00% and a Zacks Rank #3 at present. It is scheduled to post first-quarter earnings on May 6. The Zacks Consensus Estimate is pegged at a loss of 25 cents per share. You can see the complete list of today’s Zacks #1 Rank stocks here.
LCID missed earnings estimates in each of the trailing four quarters, the average negative surprise being 7.96%.
Rivian Automotive, Inc. (RIVN - Free Report) has an Earnings ESP of -1.77% and a Zacks Rank #3 at present. The company is slated to post first-quarter earnings on May 7. The Zacks Consensus Estimate is pegged at a loss of $1.13 per share.
RIVN surpassed earnings estimates in each of the trailing four quarters, the average surprise being 13.82%.
Nikola Corporation (NKLA - Free Report) has an Earnings ESP of 0.00% and a Zacks Rank #2 at present. The company is scheduled to post first-quarter earnings on May 7. The Zacks Consensus Estimate is pegged at a loss of 9 cents per share.
NKLA surpassed earnings estimates in three of the trailing four quarters and missed once, the average negative surprise being 11.24%.
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BorgWarner (BWA) to Report Q1 Earnings: What's in Store?
BorgWarner (BWA - Free Report) is slated to release first-quarter 2024 results on May 2, before market open. The Zacks Consensus Estimate for the to-be-reported quarter’s earnings per share and revenues is pegged at 87 cents and $3.53 billion, respectively.
For the first quarter, the consensus estimate for BWA’s earnings per share has moved down a penny in the past seven days. Its bottom-line estimates imply a decline of 20.18% from the year-ago reported number. The Zacks Consensus Estimate for its quarterly revenues suggests a year-over-year decline of 15.47%.
Over the trailing four quarters, BWA surpassed earnings estimates on two occasions and missed twice, the average surprise being 4.84%. This is depicted in the graph below:
BorgWarner Inc. Price and EPS Surprise
BorgWarner Inc. price-eps-surprise | BorgWarner Inc. Quote
Q4 Highlights
In the fourth quarter of 2023, BWA reported adjusted earnings per share of 90 cents, down from $1.26 recorded in the prior-year quarter. The bottom line missed the consensus mark of 93 cents.
The company reported net sales of $3.52 billion, missing the Zacks Consensus Estimate of $3.61 billion. The top line also decreased 14.4% year over year.
Things to Note
The acquisition of the charging business of SSE in China expanded BorgWarner's footprint beyond Europe and North America, while the buyout of Eldor Corporation’s Electric Hybrid System business has further enhanced BWA’s electric product portfolio. Contracts from XPeng, a global OEM and a major Chinese OEM are expected to drive the company’s top-line growth. Acquisitions and frequent business wins are likely to have bolstered the company’s performance in the to-be-reported quarter.
BorgWarner is likely to benefit from the soaring popularity of EVs and expects hybrid and electric technologies to be its major revenue drivers. It expects its 2024 eProduct sales in the band of $2.5-$2.8 billion, implying year-over-year growth of 25-40%. The expected rise in eProduct sales in 2024 is likely to have boosted the company’s top-line growth in the to-be-reported quarter.
On the flip side, per S&P Global Mobility, global light vehicle production in 2024 is expected to decline 0.4% year over year to 89.4 million units. The decrease in production is likely to have hurt the demand for BorgWarner’s offerings, which might have negatively impacted BWA’s first-quarter results.
BorgWarner has been bearing the brunt of high SG&A costs over the past several quarters. This trend is expected to have continued in the to-be-reported quarter. Rising costs might have weighed on the company’s margin in the first quarter.
Here's a sneak peek at the firm’s revenues and EBIT projections for the to-be-reported quarter.
Our estimate for BorgWarner’s Air Management segment’s first-quarter sales is pinned at $2.05 billion, suggesting a rise from $1.98 billion reported in the year-ago quarter. EBIT from the segment is estimated at $300.3 million, indicating a rise from $284 million recorded in the year-ago quarter.
For the first quarter, our forecast for the Drivetrain & Battery Systems segment is pegged at $1.02 billion, suggesting a rise from the $956 million registered in the year-ago quarter. Also, the segmental EBIT estimate of $126.2 million indicates an increase from $113 million generated in the first quarter of 2023.
Our forecast for the ePropulsion segment is pinned at $542 million, suggesting a rise from the $487 million registered in the year-ago quarter. Our estimate for loss before interest and taxes is pegged at $23.3 million compared with the loss of $35 million registered in the first quarter of 2023.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for BorgWarner in the to-be-reported quarter, as it does not have the right combination of the two key ingredients. A combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is not the case here, as stated below.
Earnings ESP: BWA has an Earnings ESP of -1.27%. This is because the Most Accurate Estimate is pegged lower than the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: BorgWarner currently carries a Zacks Rank #3.
Earnings Whispers for Other Auto Stocks
Lucid Group, Inc. (LCID - Free Report) has an Earnings ESP of -8.00% and a Zacks Rank #3 at present. It is scheduled to post first-quarter earnings on May 6. The Zacks Consensus Estimate is pegged at a loss of 25 cents per share. You can see the complete list of today’s Zacks #1 Rank stocks here.
LCID missed earnings estimates in each of the trailing four quarters, the average negative surprise being 7.96%.
Rivian Automotive, Inc. (RIVN - Free Report) has an Earnings ESP of -1.77% and a Zacks Rank #3 at present. The company is slated to post first-quarter earnings on May 7. The Zacks Consensus Estimate is pegged at a loss of $1.13 per share.
RIVN surpassed earnings estimates in each of the trailing four quarters, the average surprise being 13.82%.
Nikola Corporation (NKLA - Free Report) has an Earnings ESP of 0.00% and a Zacks Rank #2 at present. The company is scheduled to post first-quarter earnings on May 7. The Zacks Consensus Estimate is pegged at a loss of 9 cents per share.
NKLA surpassed earnings estimates in three of the trailing four quarters and missed once, the average negative surprise being 11.24%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.