BorgWarner's (BWA) Q4 Earnings Surpass Estimates, Up Y/Y

BorgWarner Inc. (NYSE:BWA) reported adjusted earnings of $1.07 per share in fourth-quarter 2017, beating the Zacks Consensus Estimate of $1.02. Adjusted earnings increased from 85 cents per share in the year-ago quarter.

BorgWarner logged revenues of $2.59 billion, surpassing the Zacks Consensus Estimate of $2.50 billion. The figure was $2.26 billion in fourth-quarter 2016.

In 2017, adjusted earnings were $3.89 per share, up from $3.27 in previous year. Also, revenues came in at $9.80 billion, higher than $9.1 billion in 2016.

While operating income amounted to $209 million, operating loss in fourth-quarter 2016 was $458 million.

Net loss in the reported quarter came in at $146.2 million compared with $293.3 million in fourth-quarter 2016.

Segment Details

Revenues from the Engine segment increased to $1.58 billion from $1.39 billion in the prior-year quarter. Excluding the impact of foreign currencies, net sales rose 8.4% at the segment.

At the Drivetrain segment, revenues were up $1.02 billion in the fourth quarter from $883.2 million in the prior-year quarter. Excluding the impact of foreign currencies and the net impact of M&A, net sales rallied 13.1% year over year.

Financial Position

BorgWarner had $545.3 million in cash as of Dec 31, 2017 compared with $443.7 million as of Dec 31, 2016. As of Dec 31, 2017, long-term debt increased to $2.10 billion from $2.04 billion as of Dec 31, 2016.

In 2017, net cash provided by operating activities was up to $1.18 billion from $1.04 billion in the previous year. In 2017, capital expenditures, including tooling outlays, increased to $560 million from $500.6 million in 2016.

Outlook

For first-quarter 2018, the company envisions net earnings to lie within the range of 99 cents to $1.31 per share. Moreover, it expects net organic sales growth of 3-5.5% compared with net sales of $2.41 billion in the year-ago quarter.

For the current year, the company reaffirmed organic growth guidance and projects net sales of around $10.52-$10.69 billion, which translates into organic growth rate of 5-7%.

Furthermore, BorgWarner expects positive impact of foreign currencies on the appreciation of the Euro and Chinese Yuan of $170 million.

Additionally, this Zacks Rank #3 (Hold) company expects net earnings in the range of $4.25-$4.35 per share.

Some better-ranked stocks in the auto space are Volkswagen (DE:VOWG_p) A.G. (OTC:VLKAY) , Oshkosh Corp. (NYSE:OSK) and Daimler A.G. (OTC:DDAIF) . While Volkswagen sports a Zacks Rank #1 (Strong Buy), Oshkosh and Daimler carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Volkswagen has an expected long-term growth rate of 18.7%. The stock has gained 5.4% in the last three months.

Oshkosh has an expected long-term growth rate of 14.5%. Shares of the company were up 13.3% in the last six months.

Daimler has an expected long-term growth rate of 2.9%. In the last six months, shares of the company have rallied 17.6%.

BorgWarner Inc. Price, Consensus and EPS Surprise

BorgWarner Inc. Price, Consensus and EPS Surprise | BorgWarner Inc. Quote

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