BorgWarner (BWA) Tops Q4 EPS by 25c, Revenues Beat; Offers FY21 EPS/Revenues Guidance Above Consensus

BorgWarner (NYSE: BWA) reported Q4 EPS of $1.18, $0.25 better than the analyst estimate of $0.93. Revenue for the quarter came in at $3.93 billion versus the consensus estimate of $3.64 billion.

Fourth Quarter Highlights:

• U.S. GAAP net sales of $3,926 million, up 53.4% compared with fourth quarter 2019.
  • Excluding the impact of foreign currencies and the impact of the Delphi Technologies acquisition, net sales were up 6.2% compared with fourth quarter 2019.
• U.S. GAAP net income of $358 million, or $1.52 per diluted share.
  • Excluding the $0.34 per diluted share related to non-comparable items (detailed in the table below), adj. net income was $1.18 per diluted share.
• U.S. GAAP operating income of $214 million, or 5.5% of net sales.
  • Excluding the $234 million of net pretax impacts related to non-comparable items, adj. operating income was $448 million, or 11.4% of net sales.
• Net cash provided by operating activities of $416 million.
  • Free cash flow of $197 million.

GUIDANCE:

BorgWarner sees FY2021 EPS of $3.85-$4.25, versus the consensus of $3.84. BorgWarner sees FY2021 revenue of $14.7-15.3 billion, versus the consensus of $14.61 billion.

• The Company has provided 2021 full year guidance. Net sales are expected to be in the range of $14.7 billion to $15.3 billion, compared with 2020 pro forma combined sales of $12.8 billion. This implies a year-over-year increase in organic sales of 12% to 17%. The Company expects its weighted light and commercial vehicle markets to increase in the range of approximately 11% to 14% in 2021. Foreign currencies are expected to result in a year-over-year increase in sales of approximately $355 million, primarily due to the strengthening of the Euro and Chinese Renminbi against the U.S. dollar.
• Operating margin is expected to be in the range of 8.6% to 9.5%. Excluding the impact of non-comparable items, adjusted operating margin is expected to be in the range of 10.0% to 10.5%. Net earnings are expected to be within a range of $3.23 to $3.77 per diluted share. Excluding the impact of non-comparable items, adjusted net earnings are expected to be within a range of $3.85 to $4.25 per diluted share. Full-year operating cash flow is expected to be in the range of $1,450 million to $1,600 million, while free cash flow is expected to be in the range of $800 million to $900 million.

For earnings history and earnings-related data on BorgWarner (BWA) click here.

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