BorgWarner Eyes New Business - Analyst Blog
11 Novembre 2011 - 6:24PM
Zacks
BorgWarner
Inc. (BWA) announced that it expects
net new powertrain business of $2.5 billion from 2012 through 2014,
reflecting a 9% increase from its previous three-year net new
business. The new business is expected to generate from strong
demand for the company’s environment-friendly technologies,
including gasoline and diesel turbochargers, dual-clutch
transmission, engine timing systems and emissions
products.
About 80% of
the new business is expected to come from engine-related products
including turbochargers, ignition systems, emissions products,
engine timing systems, variable cam timing modules and thermal
systems. The remaining 20% of the business is expected to emanate
from drivetrain-related products such as the company’s
fuel-efficient DualTronic transmission technology, traditional
automatic transmission and all-wheel drive technologies.
The new
business will involve programs with every major automaker around
the world. Being the market leader in new powertrain technology,
Europe is expected to account for 45% of the business.
Meanwhile,
Asia is anticipated to account for 35%, with China (22%) being the
largest player as the top 25 customers of the business will include
eight Chinese domestic original equipment manufacturers (OEMs). The
remaining 20% of the business is expected to come from the U.S.
over three years.
Tightening
emissions standards and a heightened focus on fuel economy in the
commercial vehicle market are expected to help BorgWarner win new
businesses. The top twenty-five customers of its new business
include six commercial vehicle OEMs and 18% is related to the
commercial vehicle market.
Considering
the company’s technology products, turbochargers are expected to
account for 50% of the company’s new business. The number of
turbochargers in the market is expected to grow 50% from nearly 29
million units presently to over 43 million units by
2016.
Meanwhile,
dual-clutch technology is anticipated to account for 7% of the new
business. The dual-clutch transmissions market is expected to
increase three-fold to 8 million units by 2016.
BorgWarner,
a Zacks #2 Rank company, is a leading manufacturer of powertrain
products for the world’s major automakers. Its products include
four-wheel-drive and all-wheel-drive transfer cases (primarily for
light trucks and sport utility vehicles or SUVs), as well as
automatic transmission and timing chain systems.
These
products are manufactured and sold worldwide, primarily to original
equipment manufacturers of passenger cars, SUVs, trucks and
commercial transportation products. The company’s largest customers
include Volkswagen
(VLKAY) and
Ford
Motor (F).
The company
posted a 64% increase in profit to $1.15 per share in the third
quarter of the year from 70 cents (excluding non-recurring item) in
the same quarter of 2010. The profit was higher than the Zacks
Consensus Estimate of $1.05.
Net sales
surged 27% to $1.79 billion from $1.41 billion in the year-ago
quarter led by strong demand for the company’s products driven by
improved fuel economy and emission standards.
For full
year 2011, BorgWarner stated its EPS guidance of $4.35 to $4.45,
which is at the upper end of its previous guidance of $4.25–$4.45.
The company expects revenues to grow between 26% and 27%, compared
with the prior guidance of 25% to 28%.
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