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BorgWarner's (BWA) Q1 Earnings & Sales Top Estimates, '21 View Up

Zacks Equity Research
·4-min read

BorgWarner Inc. BWA reported adjusted earnings of $1.21 per share in first-quarter 2021, beating the Zacks Consensus Estimate of 92 cents. Higher-than-anticipated contributions from the Air Management and e-Propulsion & Drivetrain segments resulted in this outperformance.

Moreover, the bottom line compares favorably with the year-ago quarter’s profit of 77 cents per share.

This automotive equipment supplier reported net sales of $4,009 million, outpacing the Zacks Consensus Estimate of $3,587 million. Moreover, the top-line figure comes in a whopping 76% higher than the year-ago quarter’s $2,279 million.

Segmental Performance

Air Management: Net sales totaled $2,011 million for the reported quarter compared with the $1,434 million registered during the first quarter 2020. The sales figure also topped the Zacks Consensus Estimate of $1,716 million. Excluding the impact of foreign-currency translations but including the estimated growth in Delphi Technologies-related revenues, sales from the segment went up 14% year over year. Adjusted EBIT of $322 million compares favorably with the year-ago period’s $208 million. The reported EBIT also surpassed the consensus mark of $233 million.

e-Propulsion & Drivetrain: Sales from the segment came in at $1,466 million compared with the $860 million seen during the first quarter 2020. The sales figure also exceeded the Zacks Consensus Estimate of $1,209 million. Excluding the impact of foreign currency translations but including the estimated growth in Delphi Technologies-related revenues, sales from the segment climbed 36% year on year. The segment generated adjusted EBIT of $137 million for first-quarter 2021, higher than the $63 million recorded in the corresponding period of 2020, beating the consensus mark of $111 million.  

Fuel Injection: Sales and adjusted EBIT from the segment totaled $475 million and $33 million, respectively. The sales figure topped the Zacks Consensus Estimate of $461 million. Adjusted EBIT margin for the quarter was 6.9%.

Aftermarket: Sales and adjusted EBIT from the segment totaled $197 million and $21 million, respectively. The sales figure missed the Zacks Consensus Estimate of $209 million. Adjusted EBIT margin for the quarter came in at 10.7%.

Financial Position

As of Mar 31, 2021, BorgWarner — peers of which include Magna International MGA, Meritor MTOR and Autoliv ALV — had $1,755 million in cash compared with $901 million as of Mar 31, 2020. In the March-end quarter, long-term debt was $3,708 million, up from the $1,664 million recorded in the prior-year period.

Net cash provided by operating activities was $342 million during the first quarter compared with the $263 million witnessed in the year-ago period. Investment in capital expenditure, including tooling outlays, was $195 million in the March-end quarter compared with the year-ago quarter’s $117 million.

Outlook

For full-year 2021, the Zacks Rank #3 (Hold) company anticipates net sales within $14.8-$15.4 billion, slightly up from the previous guidance of $14.7-$15.3 billion.  Adjusted operating margin and net earnings are expected in the band of 10.1-10.5% and $3.42-$3.92 per share, respectively, higher than the earlier guidance of 10-10.5% and $3.23-$3.77 per share, respectively. Free cash flow is projected between $800 million and $900 million.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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BorgWarner Inc. (BWA) : Free Stock Analysis Report
 
Magna International Inc. (MGA) : Free Stock Analysis Report
 
Autoliv, Inc. (ALV) : Free Stock Analysis Report
 
Meritor, Inc. (MTOR) : Free Stock Analysis Report
 
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Zacks Investment Research