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BorgWarner Inc. (BWA - Free Report) reported adjusted earnings of $1.19 per share for second-quarter 2024, down from $1.35 recorded in the prior-year quarter. The bottom line, however, surpassed the Zacks Consensus Estimate of 98 cents.
The automotive equipment supplier reported net sales of $3.60 billion, missing the Zacks Consensus Estimate of $3.73 billion. The top line also declined 2% year over year.
Air Management: Net sales totaled $1.97 billion in the reported quarter compared with $2.03 billion in the year-ago period. It also missed our estimate of $2.06 billion. Adjusted operating income of $304 million fell from $305 million recorded in the year-ago quarter and also lagged our estimate of $310 million.
Drivetrain & Battery Systems: Net sales totaled $1.19 billion in the reported quarter compared with $1.12 billion in the year-ago period and surpassed our projection of $1.17 billion. Adjusted operating income of $176 million increased from $142 million recorded in the year-ago quarter and topped our estimate of $151 million.
e-Propulsion: Sales from the segment were $464 million, which declined from $566 million a year ago and missed our estimate of $559.6 million. The segment incurred an adjusted operating loss of $49 million, wider than the operating loss of $19 million in the corresponding period of 2023. The loss was also wider than our estimate of a loss of $33.9 million.
Financial Position
As of Jun 30, 2024, BorgWarner had $1.29 billion in cash/cash equivalents/restricted cash compared with $1.53 billion as of Dec 31, 2023. As of Jun 30, long-term debt was $3.28 billion, down from $3.70 billion recorded as of Dec 31, 2023.
Net cash used in operating activities from continuing operations was $462 million in the quarter under review. Capital expenditures and free cash flow totaled $165 million and $297 million, respectively.
Revised 2024 Guidance
For full-year 2024, the company now anticipates net sales in the band of $14.1-$14.4 billion, down from the previous estimate of $14.4-$14.9 billion.
The adjusted operating margin is expected in the band of 9.6-9.8%, up from the previous estimate of 9.2-9.6%. Adjusted earnings are now estimated in the range of $3.95-$4.15 per share compared with the previously estimated range of $3.80-$4.15 per share. Operating cash is still estimated in the range of $1,325-$1,375 million. Free cash flow is projected in the band of $475-$575 million.
The company expects its eProduct sales to be near the low end of the previous outlook of $2.5-$2.8 billion, up from approximately $2 billion in 2023.
The consensus estimate for SZKMY’s 2025 earnings suggests a year-over-year growth of 2.09%. EPS estimates for 2025 and 2026 have improved 38 cents and 15 cents, respectively, in the past 60 days.
The Zacks Consensus Estimate for BYDDY’s 2024 sales and earnings suggests year-over-year growth of 21.11% and 9.93%, respectively. EPS estimates for 2024 and 2025 have improved 19 cents and 29 cents, respectively, in the past 30 days.
The Zacks Consensus Estimate for HMC’s 2025 sales and earnings suggests year-over-year growth of 0.73%. EPS estimates for 2025 have improved a penny in the past seven days. EPS estimates for 2026 have improved 4 cents in the past 30 days.
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BorgWarner (BWA) Q2 Earnings Beat Estimates, Guidance Revised
BorgWarner Inc. (BWA - Free Report) reported adjusted earnings of $1.19 per share for second-quarter 2024, down from $1.35 recorded in the prior-year quarter. The bottom line, however, surpassed the Zacks Consensus Estimate of 98 cents.
The automotive equipment supplier reported net sales of $3.60 billion, missing the Zacks Consensus Estimate of $3.73 billion. The top line also declined 2% year over year.
BorgWarner Inc. Price, Consensus and EPS Surprise
BorgWarner Inc. price-consensus-eps-surprise-chart | BorgWarner Inc. Quote
Segmental Performance
Air Management: Net sales totaled $1.97 billion in the reported quarter compared with $2.03 billion in the year-ago period. It also missed our estimate of $2.06 billion. Adjusted operating income of $304 million fell from $305 million recorded in the year-ago quarter and also lagged our estimate of $310 million.
Drivetrain & Battery Systems: Net sales totaled $1.19 billion in the reported quarter compared with $1.12 billion in the year-ago period and surpassed our projection of $1.17 billion. Adjusted operating income of $176 million increased from $142 million recorded in the year-ago quarter and topped our estimate of $151 million.
e-Propulsion: Sales from the segment were $464 million, which declined from $566 million a year ago and missed our estimate of $559.6 million. The segment incurred an adjusted operating loss of $49 million, wider than the operating loss of $19 million in the corresponding period of 2023. The loss was also wider than our estimate of a loss of $33.9 million.
Financial Position
As of Jun 30, 2024, BorgWarner had $1.29 billion in cash/cash equivalents/restricted cash compared with $1.53 billion as of Dec 31, 2023. As of Jun 30, long-term debt was $3.28 billion, down from $3.70 billion recorded as of Dec 31, 2023.
Net cash used in operating activities from continuing operations was $462 million in the quarter under review. Capital expenditures and free cash flow totaled $165 million and $297 million, respectively.
Revised 2024 Guidance
For full-year 2024, the company now anticipates net sales in the band of $14.1-$14.4 billion, down from the previous estimate of $14.4-$14.9 billion.
The adjusted operating margin is expected in the band of 9.6-9.8%, up from the previous estimate of 9.2-9.6%. Adjusted earnings are now estimated in the range of $3.95-$4.15 per share compared with the previously estimated range of $3.80-$4.15 per share. Operating cash is still estimated in the range of $1,325-$1,375 million. Free cash flow is projected in the band of $475-$575 million.
The company expects its eProduct sales to be near the low end of the previous outlook of $2.5-$2.8 billion, up from approximately $2 billion in 2023.
Zacks Rank & Key Picks
BWA currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the auto space are Suzuki Motor Corporation (SZKMY - Free Report) , BYD Company Limited (BYDDY - Free Report) and Honda Motor Co., Ltd. (HMC - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for SZKMY’s 2025 earnings suggests a year-over-year growth of 2.09%. EPS estimates for 2025 and 2026 have improved 38 cents and 15 cents, respectively, in the past 60 days.
The Zacks Consensus Estimate for BYDDY’s 2024 sales and earnings suggests year-over-year growth of 21.11% and 9.93%, respectively. EPS estimates for 2024 and 2025 have improved 19 cents and 29 cents, respectively, in the past 30 days.
The Zacks Consensus Estimate for HMC’s 2025 sales and earnings suggests year-over-year growth of 0.73%. EPS estimates for 2025 have improved a penny in the past seven days. EPS estimates for 2026 have improved 4 cents in the past 30 days.