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BorgWarner Inc. (BWA - Free Report) reported adjusted earnings of $1.03 per share for first-quarter 2024, down from $1.09 per share recorded in the prior-year quarter. The bottom line, however, surpassed the Zacks Consensus Estimate of 87 cents.
The automotive equipment supplier reported net sales of $3.6 billion, beating the Zacks Consensus Estimate of $3.52 billion. The top line, however, declined 13.9% year over year.
Air Management: Net sales totaled $2.03 billion in the reported quarter compared with $1.98 billion in the year-ago period. However, it missed our estimate of $2.05 billion. Adjusted operating income of $308 million rose from $285 million recorded in the year-ago quarter and topped our estimate of $300 million.
Drivetrain & Battery Systems: Net sales totaled $1.16 billion in the reported quarter compared with $956 million in the year-ago period and surpassed our projection of $1.02 billion. Adjusted operating income of $158 million increased from $111 million recorded in the year-ago quarter and topped our estimate of $126 million.
e-Propulsion: Sales from the segment were $436 million, which declined from $487 million a year ago and missed our estimate of $542 million. The segment incurred an adjusted operating loss of $62 million, wider than the operating loss of $35 million in the corresponding period of 2023. The loss was also wider than our estimate of a loss of $23 million.
Financial Position
As of Mar 31, 2024, BorgWarner had $1.03 billion in cash/cash equivalents/restricted cash compared with $1.53 billion as of Dec 31, 2023. As of Mar 31, long-term debt was $3.3 billion, down from $3.7 billion recorded on Dec 31, 2023.
Net cash used in operating activities from continuing operations was $118 million in the quarter under review. Capital expenditures and negative free cash flow totaled $190 million and $308 million, respectively.
Revised 2024 Guidance
For full-year 2024, the company still anticipates net sales in the band of $14.4-$14.9 billion, up from $14.2 billion reported in 2023.
The adjusted operating margin is expected in the band of 9.2-9.6%. Adjusted earnings are now estimated in the range of $3.80-$4.15 per share, up from the previous estimate of $3.65-$4 per share. Operating cash is still estimated in the range of $1,325-$1,375 million. Free cash flow is projected in the band of $475-$575 million.
The company still expects its eProduct sales in the range of $2.5-$2.8 billion, up from approximately $2 billion reported in 2023.
The Zacks Consensus Estimate for GELYY’s 2024 sales suggests year-over-year growth of 36.6%. The EPS estimates for 2024 and 2025 have moved up 34 cents and 54 cents, respectively, in the past 60 days.
The Zacks Consensus Estimate for VLVLY’s 2024 earnings suggests year-over-year growth of 0.43%. The EPS estimates for 2024 and 2025 have improved 5 cents and 11 cents, respectively, in the past 30 days.
The Zacks Consensus Estimate for GOEV’s 2024 sales and earnings suggests year-over-year growth of 7,722.3% and 68.24%, respectively. The EPS estimates for 2024 and 2025 have improved $4.27 and $4.71, respectively, in the past 30 days.
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BorgWarner (BWA) Q1 Earnings Beat Estimates, Guidance Revised
BorgWarner Inc. (BWA - Free Report) reported adjusted earnings of $1.03 per share for first-quarter 2024, down from $1.09 per share recorded in the prior-year quarter. The bottom line, however, surpassed the Zacks Consensus Estimate of 87 cents.
The automotive equipment supplier reported net sales of $3.6 billion, beating the Zacks Consensus Estimate of $3.52 billion. The top line, however, declined 13.9% 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 $2.03 billion in the reported quarter compared with $1.98 billion in the year-ago period. However, it missed our estimate of $2.05 billion. Adjusted operating income of $308 million rose from $285 million recorded in the year-ago quarter and topped our estimate of $300 million.
Drivetrain & Battery Systems: Net sales totaled $1.16 billion in the reported quarter compared with $956 million in the year-ago period and surpassed our projection of $1.02 billion. Adjusted operating income of $158 million increased from $111 million recorded in the year-ago quarter and topped our estimate of $126 million.
e-Propulsion: Sales from the segment were $436 million, which declined from $487 million a year ago and missed our estimate of $542 million. The segment incurred an adjusted operating loss of $62 million, wider than the operating loss of $35 million in the corresponding period of 2023. The loss was also wider than our estimate of a loss of $23 million.
Financial Position
As of Mar 31, 2024, BorgWarner had $1.03 billion in cash/cash equivalents/restricted cash compared with $1.53 billion as of Dec 31, 2023. As of Mar 31, long-term debt was $3.3 billion, down from $3.7 billion recorded on Dec 31, 2023.
Net cash used in operating activities from continuing operations was $118 million in the quarter under review. Capital expenditures and negative free cash flow totaled $190 million and $308 million, respectively.
Revised 2024 Guidance
For full-year 2024, the company still anticipates net sales in the band of $14.4-$14.9 billion, up from $14.2 billion reported in 2023.
The adjusted operating margin is expected in the band of 9.2-9.6%. Adjusted earnings are now estimated in the range of $3.80-$4.15 per share, up from the previous estimate of $3.65-$4 per share. Operating cash is still estimated in the range of $1,325-$1,375 million. Free cash flow is projected in the band of $475-$575 million.
The company still expects its eProduct sales in the range of $2.5-$2.8 billion, up from approximately $2 billion reported in 2023.
Zacks Rank & Key Picks
BWA currently carries a Zacks Rank #3 (Hold).
Some better-ranked players in the auto space are Geely Automobile Holdings Limited (GELYY - Free Report) , Volvo (VLVLY - Free Report) and Canoo Inc. (GOEV - 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 GELYY’s 2024 sales suggests year-over-year growth of 36.6%. The EPS estimates for 2024 and 2025 have moved up 34 cents and 54 cents, respectively, in the past 60 days.
The Zacks Consensus Estimate for VLVLY’s 2024 earnings suggests year-over-year growth of 0.43%. The EPS estimates for 2024 and 2025 have improved 5 cents and 11 cents, respectively, in the past 30 days.
The Zacks Consensus Estimate for GOEV’s 2024 sales and earnings suggests year-over-year growth of 7,722.3% and 68.24%, respectively. The EPS estimates for 2024 and 2025 have improved $4.27 and $4.71, respectively, in the past 30 days.