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BorgWarner (BWA) Posts Narrower-Than-Expected Loss in Q2
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BorgWarner Inc. (BWA - Free Report) reported adjusted loss of 14 cents per share in second-quarter 2020, much narrower than the Zacks Consensus Estimate of loss of 47 cents. Higher revenues across both of the company’s segments aided the results. BorgWarner had reported earnings of $1 per share in the year-ago quarter.
Net loss amounted to $98 million in the second quarter, as against the income of $172 million reported in the prior-year quarter.
BorgWarner’s net sales slid 44% year over year to $1,426 million due to production disruptions arising from the coronavirus crisis. The reported figure, however, beat the Zacks Consensus Estimate of $1,175 million.
In the June-end quarter, operating loss amounted to $78 million, as against the prior-year quarter’s profit of $285 million.
Net sales in the Engine segment fell to $826 million from the year-ago quarter’s $1,569 million. The sales figure, however, surpassed the Zacks Consensus Estimate of $665 million. Excluding the impact of foreign-currency translation, net sales were down 46% year over year and adjusted EBIT (earnings before interest, income taxes and non-controlling interest) plummeted 89% to $28 million chiefly on lower revenues.
In the Drivetrain segment, net sales decreased to $607 million from the $998 million reported in the year-earlier quarter. The figure, however, beat the Zacks Consensus Estimate of $391million. Excluding the impact of foreign-currency translations, net sales declined 38%, year over year, and adjusted EBIT slumped 99% to $1 million on dismal revenues.
Financial Position
As of Jun 30, 2020, BorgWarner had $2,003 million in cash compared with $832 million as of Dec 31, 2019. In the April-June quarter, long-term debt was $2,762 million, up from the $1,674 million recorded at the end of 2019.
Net cash provided by operating activities was $64 million as of Jun 30, 2020, compared with $427 million as of Jun 30, 2019. Investment in capital expenditure, including tooling outlays was $54 million in the June-end quarter compared with the year-ago quarter’s $127 million.
Outlook
For 2020, the company projects net sales of $8-$8.4 billion, up from the previous estimate of $7.25-$8 billion. Free cash flow is expected in the band of $300-$400 million this year, up from the prior projection of $100-$300 million.
Moreover, current-year operating cash flow is expected in the range of $700 million to $850 million, up from the prior guidance of $530-$780 million. Capex is expected in the range of $400-$450 million in the ongoing year.
Zacks Rank & Stocks to Consider
BorgWarner currently carries a Zacks Rank of 3 (Hold).
Shares of AutoNation have rallied 8.2%, year to date, compared with the industry’s gain of 7.5%.
Shares of LCI Industries have appreciated 19.1%, year to date, as against the industry’s decline of 6.2%.
Shares of Geely Automobile have gained 11.8%, year to date, as against the industry’s decline of 13.4%.
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A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
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BorgWarner (BWA) Posts Narrower-Than-Expected Loss in Q2
BorgWarner Inc. (BWA - Free Report) reported adjusted loss of 14 cents per share in second-quarter 2020, much narrower than the Zacks Consensus Estimate of loss of 47 cents. Higher revenues across both of the company’s segments aided the results. BorgWarner had reported earnings of $1 per share in the year-ago quarter.
Net loss amounted to $98 million in the second quarter, as against the income of $172 million reported in the prior-year quarter.
BorgWarner’s net sales slid 44% year over year to $1,426 million due to production disruptions arising from the coronavirus crisis. The reported figure, however, beat the Zacks Consensus Estimate of $1,175 million.
In the June-end quarter, operating loss amounted to $78 million, as against the prior-year quarter’s profit of $285 million.
BorgWarner Inc. Price, Consensus and EPS Surprise
BorgWarner Inc. price-consensus-eps-surprise-chart | BorgWarner Inc. Quote
Segmental Performance
Net sales in the Engine segment fell to $826 million from the year-ago quarter’s $1,569 million. The sales figure, however, surpassed the Zacks Consensus Estimate of $665 million. Excluding the impact of foreign-currency translation, net sales were down 46% year over year and adjusted EBIT (earnings before interest, income taxes and non-controlling interest) plummeted 89% to $28 million chiefly on lower revenues.
In the Drivetrain segment, net sales decreased to $607 million from the $998 million reported in the year-earlier quarter. The figure, however, beat the Zacks Consensus Estimate of $391million. Excluding the impact of foreign-currency translations, net sales declined 38%, year over year, and adjusted EBIT slumped 99% to $1 million on dismal revenues.
Financial Position
As of Jun 30, 2020, BorgWarner had $2,003 million in cash compared with $832 million as of Dec 31, 2019. In the April-June quarter, long-term debt was $2,762 million, up from the $1,674 million recorded at the end of 2019.
Net cash provided by operating activities was $64 million as of Jun 30, 2020, compared with $427 million as of Jun 30, 2019. Investment in capital expenditure, including tooling outlays was $54 million in the June-end quarter compared with the year-ago quarter’s $127 million.
Outlook
For 2020, the company projects net sales of $8-$8.4 billion, up from the previous estimate of $7.25-$8 billion. Free cash flow is expected in the band of $300-$400 million this year, up from the prior projection of $100-$300 million.
Moreover, current-year operating cash flow is expected in the range of $700 million to $850 million, up from the prior guidance of $530-$780 million. Capex is expected in the range of $400-$450 million in the ongoing year.
Zacks Rank & Stocks to Consider
BorgWarner currently carries a Zacks Rank of 3 (Hold).
Some better-ranked stocks in the auto sector include AutoNation (AN - Free Report) , LCI Industries (LCII - Free Report) and Geely Automobile Holdings Ltd. (GELYY - Free Report) . While AutoNation and LCI Industries sport a Zacks Rank of 1, Geely Automobile carries a Zacks Rank of 2 (Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of AutoNation have rallied 8.2%, year to date, compared with the industry’s gain of 7.5%.
Shares of LCI Industries have appreciated 19.1%, year to date, as against the industry’s decline of 6.2%.
Shares of Geely Automobile have gained 11.8%, year to date, as against the industry’s decline of 13.4%.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
See 8 breakthrough stocks now>>