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Is a Beat in the Cards for BorgWarner (BWA) in Q3 Earnings?
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BorgWarner Inc. (BWA - Free Report) is set to release third-quarter 2018 earnings on Oct 25, before the market opens. In the last reported quarter, the company delivered a positive earnings surprise of 6.8%. It surpassed expectations in all of the trailing four quarters, with an average beat of 7.2%.
In the past three months, shares of BorgWarner have outperformed the industry it belongs to. The stock has declined 17.6% compared with the industry’s decrease of 19.6% during the period.
Let’s see how things are shaping up for the upcoming announcement.
Our proven model shows that BorgWarner is likely to beat earnings estimates this quarter. This is because a stock needs to have the right combination of the two key ingredients — a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — for increasing odds of an earnings beat.
Earnings ESP: BorgWarner has an Earnings ESP of +0.36% as the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at $1 and 99 cents, respectively. 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. Note that we caution against Rank #4 and 5 (Sell-rated) stocks going into the earnings announcement, especially when the company is witnessing negative estimate revisions.
What’s Driving Better-Than-Expected Earnings?
The company is expanding its footprint by growing its product portfolio and acquiring contracts. In the last month, BorgWarner announced that it selected two leading Chinese OEMs to supply its products for hybrid-electric vehicles. In the same month, BorgWarner announced that it was focusing to deliver hybridization and electrification technologies that can assist original equipment manufacturers (OEMs) to produce high-performing, energy-efficient vehicles. The company aims to offer products to customers that can meet stringent global emissions standards.
Further, the company engages in acquisitions to expand product portfolio. Sevcon, which was acquired last year, contributed $18 million in BorgWarner’s net sales of $2.69 billion in second-quarter 2018.
However, BorgWarner reduced its guidance for third-quarter and 2018 earnings in September. Per the company, weak industry volumes in China, along with short-term issues in Europe, have impelled it to reduce guidance.
Other Stocks to Consider
Here are a few other stocks worth considering from the same space, with the right combination of elements to outpace earnings estimates this time around:
Cummins Inc. (CMI - Free Report) has an Earnings ESP of +1.46% and a Zacks Rank #3. The company will report third-quarter 2018 financial figures on Oct 30.
Meritor, Inc. has an Earnings ESP of +2.36% and a Zacks Rank #3. The company’s fourth-quarter fiscal 2018 financial results are scheduled to be released on Nov 14.
American Axle & Manufacturing Holdings, Inc. (AXL - Free Report) has an Earnings ESP of +1.70% and a Zacks Rank of 3. The company’s third-quarter 2018 financial results are scheduled to be released on Nov 2.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
Image: Bigstock
Is a Beat in the Cards for BorgWarner (BWA) in Q3 Earnings?
BorgWarner Inc. (BWA - Free Report) is set to release third-quarter 2018 earnings on Oct 25, before the market opens. In the last reported quarter, the company delivered a positive earnings surprise of 6.8%. It surpassed expectations in all of the trailing four quarters, with an average beat of 7.2%.
In the past three months, shares of BorgWarner have outperformed the industry it belongs to. The stock has declined 17.6% compared with the industry’s decrease of 19.6% during the period.
Let’s see how things are shaping up for the upcoming announcement.
BorgWarner Inc. Price and EPS Surprise
BorgWarner Inc. Price and EPS Surprise | BorgWarner Inc. Quote
Why a Positive Surprise is Likely
Our proven model shows that BorgWarner is likely to beat earnings estimates this quarter. This is because a stock needs to have the right combination of the two key ingredients — a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — for increasing odds of an earnings beat.
Earnings ESP: BorgWarner has an Earnings ESP of +0.36% as the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at $1 and 99 cents, respectively. 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. Note that we caution against Rank #4 and 5 (Sell-rated) stocks going into the earnings announcement, especially when the company is witnessing negative estimate revisions.
What’s Driving Better-Than-Expected Earnings?
The company is expanding its footprint by growing its product portfolio and acquiring contracts. In the last month, BorgWarner announced that it selected two leading Chinese OEMs to supply its products for hybrid-electric vehicles. In the same month, BorgWarner announced that it was focusing to deliver hybridization and electrification technologies that can assist original equipment manufacturers (OEMs) to produce high-performing, energy-efficient vehicles. The company aims to offer products to customers that can meet stringent global emissions standards.
Further, the company engages in acquisitions to expand product portfolio. Sevcon, which was acquired last year, contributed $18 million in BorgWarner’s net sales of $2.69 billion in second-quarter 2018.
However, BorgWarner reduced its guidance for third-quarter and 2018 earnings in September. Per the company, weak industry volumes in China, along with short-term issues in Europe, have impelled it to reduce guidance.
Other Stocks to Consider
Here are a few other stocks worth considering from the same space, with the right combination of elements to outpace earnings estimates this time around:
Cummins Inc. (CMI - Free Report) has an Earnings ESP of +1.46% and a Zacks Rank #3. The company will report third-quarter 2018 financial figures on Oct 30.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Meritor, Inc. has an Earnings ESP of +2.36% and a Zacks Rank #3. The company’s fourth-quarter fiscal 2018 financial results are scheduled to be released on Nov 14.
American Axle & Manufacturing Holdings, Inc. (AXL - Free Report) has an Earnings ESP of +1.70% and a Zacks Rank of 3. The company’s third-quarter 2018 financial results are scheduled to be released on Nov 2.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>