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BorgWarner (BWA) Q1 Earnings Surpass Estimates, Down Y/Y
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BorgWarner Inc. (BWA - Free Report) has delivered adjusted earnings of $1 per share in first-quarter 2019, beating the Zacks Consensus Estimate of 94 cents. However, the figure decreased from $1.10 per share recorded in the year-ago quarter. Net income was $160 million compared with $225 million in the prior-year quarter.
BorgWarner’s net sales declined 7.8% year over year to $2.57 billion, beating the Zacks Consensus Estimate of $2.47 billion. Net sales decreased roughly $127 million, owing to foreign currency fluctuations.
In the reported quarter, operating income amounted to $264 million compared with the prior-year figure of $333 million.
Net sales from the Engine segment decreased to $1.6 billion from $1.71 billion in the prior-year quarter. Excluding impacts of foreign currencies, the segment’s net sales edged down 1.8% year over year and adjusted EBIT (earnings before interest, income taxes and non-controlling interest) declined 10% to $252 million.
At the Drivetrain segment, net sales decreased to $982 million in first-quarter 2019 from $1.08 billion in the prior-year quarter. Excluding impacts of foreign currencies, net sales declined 5.64% on a year-over-year basis and adjusted EBIT decreased 9.9% to $109 million.
Financial Position
As of Mar 31, 2019, BorgWarner had $494 million in cash compared with $739 million as of Dec 31, 2018. Long-term debt was $1.92 billion, decreasing from $1.94 billion recorded at the end of 2018.
Net cash provided by operating activities was $40 million at the end of 2019 compared with $35 million in the prior year. During the reported quarter, capital expenditure, including tooling outlays, decreased to $117 million from $160 million in first-quarter 2018.
Outlook
For second-quarter 2019, the company’s net organic sales are likely to be down 2.5% to flat from net sales of $2.69 billion in the year-ago quarter. Further, it envisions net earnings between 99 cents and $1.05 per share.
For 2019, BorgWarner reaffirmed its guidance. It anticipates net sales of $9.90-$10.37 billion and net earnings of $4-$4.25 per share. Further, operating margin is expected to be 11.9-12.2%.
Zacks Rank & Stocks to Consider
BorgWarner currently carries a Zacks Rank #3 (Hold). A few better-ranked stocks in the broader auto sector are Geely Automobile Holdings Ltd. (GELYY - Free Report) , PACCAR Inc. (PCAR - Free Report) and Fox Factory Holding Corp. (FOXF - Free Report) . While Geely currently sports a Zacks Rank #1 (Strong Buy), PACCAR and Fox Factory carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Geely’ long-term growth rate is projected at 7%. Over the past three months, shares of the company have gained 28.5%.
PACCAR has an expected long-term growth rate of 8.4%. Shares of the company have gained 16.6% over the past three months.
Fox Factory has an expected long-term growth rate of 15.1%. Shares of the company have gained 29.5% over the past three months.
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Image: Bigstock
BorgWarner (BWA) Q1 Earnings Surpass Estimates, Down Y/Y
BorgWarner Inc. (BWA - Free Report) has delivered adjusted earnings of $1 per share in first-quarter 2019, beating the Zacks Consensus Estimate of 94 cents. However, the figure decreased from $1.10 per share recorded in the year-ago quarter. Net income was $160 million compared with $225 million in the prior-year quarter.
BorgWarner’s net sales declined 7.8% year over year to $2.57 billion, beating the Zacks Consensus Estimate of $2.47 billion. Net sales decreased roughly $127 million, owing to foreign currency fluctuations.
In the reported quarter, operating income amounted to $264 million compared with the prior-year figure of $333 million.
BorgWarner Inc. Price, Consensus and EPS Surprise
BorgWarner Inc. Price, Consensus and EPS Surprise | BorgWarner Inc. Quote
Segment Details
Net sales from the Engine segment decreased to $1.6 billion from $1.71 billion in the prior-year quarter. Excluding impacts of foreign currencies, the segment’s net sales edged down 1.8% year over year and adjusted EBIT (earnings before interest, income taxes and non-controlling interest) declined 10% to $252 million.
At the Drivetrain segment, net sales decreased to $982 million in first-quarter 2019 from $1.08 billion in the prior-year quarter. Excluding impacts of foreign currencies, net sales declined 5.64% on a year-over-year basis and adjusted EBIT decreased 9.9% to $109 million.
Financial Position
As of Mar 31, 2019, BorgWarner had $494 million in cash compared with $739 million as of Dec 31, 2018. Long-term debt was $1.92 billion, decreasing from $1.94 billion recorded at the end of 2018.
Net cash provided by operating activities was $40 million at the end of 2019 compared with $35 million in the prior year. During the reported quarter, capital expenditure, including tooling outlays, decreased to $117 million from $160 million in first-quarter 2018.
Outlook
For second-quarter 2019, the company’s net organic sales are likely to be down 2.5% to flat from net sales of $2.69 billion in the year-ago quarter. Further, it envisions net earnings between 99 cents and $1.05 per share.
For 2019, BorgWarner reaffirmed its guidance. It anticipates net sales of $9.90-$10.37 billion and net earnings of $4-$4.25 per share. Further, operating margin is expected to be 11.9-12.2%.
Zacks Rank & Stocks to Consider
BorgWarner currently carries a Zacks Rank #3 (Hold). A few better-ranked stocks in the broader auto sector are Geely Automobile Holdings Ltd. (GELYY - Free Report) , PACCAR Inc. (PCAR - Free Report) and Fox Factory Holding Corp. (FOXF - Free Report) . While Geely currently sports a Zacks Rank #1 (Strong Buy), PACCAR and Fox Factory carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Geely’ long-term growth rate is projected at 7%. Over the past three months, shares of the company have gained 28.5%.
PACCAR has an expected long-term growth rate of 8.4%. Shares of the company have gained 16.6% over the past three months.
Fox Factory has an expected long-term growth rate of 15.1%. Shares of the company have gained 29.5% over the past three months.
Radical New Technology Creates $12.3 Trillion Opportunity
Imagine buying Microsoft stock in the early days of personal computers… or Motorola after it released the world’s first cell phone. These technologies changed our lives and created massive profits for investors.
Today, we’re on the brink of the next quantum leap in technology. 7 innovative companies are leading this “4th Industrial Revolution” - and early investors stand to earn the biggest profits.
See the 7 breakthrough stocks now>>