BorgWarner Beats in 1Q - Analyst Blog
26 Avril 2013 - 12:54PM
Zacks
BorgWarner Inc. (BWA) posted a 1.6% increase in
adjusted earnings to $1.30 per share (excluding non-recurring
items) in the first quarter of 2013 from $1.28 in the first quarter
of 2012. Earning per share surpassed the Zacks Consensus Estimate
by 8 cents.
Revenues dipped 3.2% to $1.85 billion, but were marginally ahead of
the Zacks Consensus Estimate of $1.84 billion. The decrease in
revenues was driven by 9% decline in light vehicle production in
Europe, which accounts for over half of the company’s sales. Global
light vehicle production went down 1%. Excluding the impact of
foreign currencies and dispositions in 2012, revenues declined 1%
year over year.
Operating income (excluding non-recurring items) declined 4.3% to
$216.0 million or 11.7% of net sales from $225.7 million or 11.8%
in the first quarter of 2012.
Segment Details
Revenues in the Engine segment dropped 3.9% to
$1.3 billion, driven by lower volumes in Europe due to the economic
weakness, which offset the favorable impacts from higher sales of
variable cam timing systems in Japan and emissions systems in Asia
and the Americas.
Excluding the negative impact of foreign currencies and
dispositions, net sales went down 1% in the segment. Adjusted
earnings before interest, income taxes and non-controlling interest
(adjusted EBIT) decreased 3.6% to $202.3 million in the quarter
from $209.8 million in the first quarter of 2012.
Revenues in the Drivetrain segment decreased 1.6%
to $601.4 million on lower production volumes in Europe, offsetting
the benefits from higher sales of all-wheel drive systems in North
America and all-wheel drive systems and transmission components in
Korea. Adjusted EBIT decreased 8.5% to $56.0 million from $61.2
million in the first quarter of 2012.
Financial Position
BorgWarner had $695.4 million in cash as of Mar 31, 2013 compared
with $715.7 million as of Dec 31, 2012. Total debt including notes
payable was $1.2 billion as of Mar 31, 2013 compared with $1.1
billion as of Dec 31, 2012. Consequently, debt-to-capitalization
ratio deteriorated to 27.5% from 25.3% as of Dec 31, 2012.
In the first three months of 2013, net cash provided by operating
activities decreased to $16.3 million from $30.8 million in the
same period of 2012. Capital expenditures, including tooling
outlays, went down to $87.4 million from $95.0 million in the
2012-quarter.
Outlook
For 2013, BorgWarner anticipates that annual sales will improve
between 2% and 6%. Excluding the impact of 2012 dispositions, net
sales are expected to increase between 3% and 7%.
The company also expects net earnings between $5.15 and $5.45 per
share for the year and operating margin to be higher than 11.5% in
2013.
Our Take
BorgWarner is a leading manufacturer of powertrain products for the
world's major automakers. The company’s products are capable of
improving vehicle performance and stability meeting fuel-efficiency
and emission standards. It currently retains a Zacks Rank #3
(Hold).
The company operates in 57 locations in 19 countries. 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 Ford Motor Co. (F), Toyota Motor
Corp. (TM) and Honda Motor Co. (HMC).
BORG WARNER INC (BWA): Free Stock Analysis Report
FORD MOTOR CO (F): Free Stock Analysis Report
HONDA MOTOR (HMC): Free Stock Analysis Report
TOYOTA MOTOR CP (TM): Free Stock Analysis Report
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