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BorgWarner Inc. (BWA - Free Report) reported adjusted earnings of $1.18 per share for fourth-quarter 2020, handily surpassing the Zacks Consensus Estimate of 88 cents amid higher-than-expected revenues. The bottom line also inched up from the year-ago figure of $1.17 per share. This automotive equipment supplier reported net sales of $3,926 million, outpacing the Zacks Consensus Estimate of $3,618 million. Moreover, the top-line figure surged 53.4% year over year.
Post the acquisition of Delphi Technologies, BorgWarner reorganized its management reporting structure into four segments — Air Management, e-Propulsion & Drivetrain, Fuel Injection and Aftermarket.
BorgWarner’s Engine and Drivetrain segments have been integrated with the acquired business, and are now termed as Air Management and ePropulsion & Drivetrain, respectively. While Delphi’s Powertrain Products segment has been consolidated into the Air Management unit, Electronics & Electrification segment has been integrated into the e-Propulsion & Drivetrain segment. Additionally, two new segments — namely Fuel Injection and Aftermarkets — have been formed as a result of the Delphi acquisition.
Air Management: Net sales totaled $1,942 million for the quarter under review, up 26.7% year over year. Excluding the impact of foreign currency translations and $312 million from the Delphi buyout, sales from the segment edged up 2.8% year over year. Adjusted EBIT of $301 million compared favorably with $264 million in the comparable year-ago period.
e-Propulsion & Drivetrain: Sales from the segment came in at $1,447 million, up 38.9% year over year. Excluding the impact of foreign currency translations and $255 million from the Delphi buyout, sales from the segment climbed 11.1% year over year. The segment generated adjusted EBIT of $164 million for fourth-quarter 2020, higher than $136 million in the corresponding period of 2019.
Fuel Injection: Sales and adjusted EBIT from the segment totaled $479 million and $39 million, respectively. Adjusted EBIT margin for the quarter was 8.1%.
Aftermarket: Sales and adjusted EBIT from the segment totaled $194 million and $22 million, respectively. Adjusted EBIT margin for the quarter was 11.3%.
Financial Position
As of Dec 31, 2020, BorgWarner — whose peers include Magna International (MGA - Free Report) , Meritor and Autoliv (ALV - Free Report) — had $1,650 million in cash compared with $832 million on Dec 31, 2019. Long-term debt was $3,738 million, up from $1,674 million recorded at the end of 2019. The company declared a quarterly cash dividend of 17 cents a share, payable on Mar 15, 2021 to shareholders of record as of Mar 1.
Net cash provided by operating activities was $416 million during the fourth quarter compared with $184 million recorded in the year-ago period. Investment in capital expenditure, including tooling outlays, was $219 million for the December-end quarter compared with the year-ago quarter’s $135 million. Free cash flow declined from $221 million in fourth-quarter 2019 to $197 million in the reported quarter.
Guidance
For full-year 2021, the Zacks Rank #3 (Hold) company anticipates net sales within $14.7-$15.3 billion, indicating an increase of 12-17% from 2020 pro-forma combined sales of $12.8 billion. Adjusted operating margin and net earnings are expected in the band of 10-10.5% and $3.23-$3.377 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 (BWA) Q4 Earnings & Sales Beat, '21 View Solid
BorgWarner Inc. (BWA - Free Report) reported adjusted earnings of $1.18 per share for fourth-quarter 2020, handily surpassing the Zacks Consensus Estimate of 88 cents amid higher-than-expected revenues. The bottom line also inched up from the year-ago figure of $1.17 per share. This automotive equipment supplier reported net sales of $3,926 million, outpacing the Zacks Consensus Estimate of $3,618 million. Moreover, the top-line figure surged 53.4% year over year.
BorgWarner Inc. Price, Consensus and EPS Surprise
BorgWarner Inc. price-consensus-eps-surprise-chart | BorgWarner Inc. Quote
Segmental Performance
Post the acquisition of Delphi Technologies, BorgWarner reorganized its management reporting structure into four segments — Air Management, e-Propulsion & Drivetrain, Fuel Injection and Aftermarket.
BorgWarner’s Engine and Drivetrain segments have been integrated with the acquired business, and are now termed as Air Management and ePropulsion & Drivetrain, respectively. While Delphi’s Powertrain Products segment has been consolidated into the Air Management unit, Electronics & Electrification segment has been integrated into the e-Propulsion & Drivetrain segment. Additionally, two new segments — namely Fuel Injection and Aftermarkets — have been formed as a result of the Delphi acquisition.
Air Management: Net sales totaled $1,942 million for the quarter under review, up 26.7% year over year. Excluding the impact of foreign currency translations and $312 million from the Delphi buyout, sales from the segment edged up 2.8% year over year. Adjusted EBIT of $301 million compared favorably with $264 million in the comparable year-ago period.
e-Propulsion & Drivetrain: Sales from the segment came in at $1,447 million, up 38.9% year over year. Excluding the impact of foreign currency translations and $255 million from the Delphi buyout, sales from the segment climbed 11.1% year over year. The segment generated adjusted EBIT of $164 million for fourth-quarter 2020, higher than $136 million in the corresponding period of 2019.
Fuel Injection: Sales and adjusted EBIT from the segment totaled $479 million and $39 million, respectively. Adjusted EBIT margin for the quarter was 8.1%.
Aftermarket: Sales and adjusted EBIT from the segment totaled $194 million and $22 million, respectively. Adjusted EBIT margin for the quarter was 11.3%.
Financial Position
As of Dec 31, 2020, BorgWarner — whose peers include Magna International (MGA - Free Report) , Meritor and Autoliv (ALV - Free Report) — had $1,650 million in cash compared with $832 million on Dec 31, 2019. Long-term debt was $3,738 million, up from $1,674 million recorded at the end of 2019. The company declared a quarterly cash dividend of 17 cents a share, payable on Mar 15, 2021 to shareholders of record as of Mar 1.
Net cash provided by operating activities was $416 million during the fourth quarter compared with $184 million recorded in the year-ago period. Investment in capital expenditure, including tooling outlays, was $219 million for the December-end quarter compared with the year-ago quarter’s $135 million. Free cash flow declined from $221 million in fourth-quarter 2019 to $197 million in the reported quarter.
Guidance
For full-year 2021, the Zacks Rank #3 (Hold) company anticipates net sales within $14.7-$15.3 billion, indicating an increase of 12-17% from 2020 pro-forma combined sales of $12.8 billion. Adjusted operating margin and net earnings are expected in the band of 10-10.5% and $3.23-$3.377 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.
+1,500% Growth: One of 2021’s Most Exciting Investment Opportunities
In addition to the stocks you read about above, would you like to see Zacks’ top picks to capitalize on the Internet of Things (IoT)? It is one of the fastest-growing technologies in history, with an estimated 77 billion devices to be connected by 2025. That works out to 127 new devices per second.
Zacks has released a special report to help you capitalize on the Internet of Things’s exponential growth. It reveals 4 under-the-radar stocks that could be some of the most profitable holdings in your portfolio in 2021 and beyond.
Click here to download this report FREE >>