BorgWarner Misses Estimates - Analyst Blog
April 26 2012 - 11:11AM
Zacks
BorgWarner Inc. (BWA) witnessed a 28% increase
in profit to $1.28 per share in the first quarter of 2012 from
$1.00 per share in the same quarter of 2011. With this, the auto
parts maker missed the Zacks Consensus Estimate by 2 cents per
share.
Revenues in the quarter hiked 10.5% to $1.9 billion from $1.7
billion in the first quarter of 2011. It was in line with the Zacks
Consensus Estimate. The impact of foreign currencies, primarily the
Euro, reduced net sales by about $45 million in the quarter.
Operating income increased 26% to $225.7 million from $179.3
million in the same quarter prior year. Operating margin was 12%
compared with 10% in the corresponding quarter last year.
Revenues from the Engine segment hiked 4.7% to $1.3 billion due
to strong turbocharger technology adoption around the world as well
as growth in sales of engine timing system and emission products.
Excluding the impact of currency, revenues increased about 8% in
the segment. Adjusted earnings before interest, income taxes and
non-controlling interest (EBIT) increased 13% to $210 million from
$186 million in the first quarter 2011.
Revenues in the Drivetrain segment escalated 26% to $611 million
from $486 million in the first quarter of 2011. The increase was
driven by strong all wheel drive system sales in North America and
Europe, higher dual clutch transmission module sales in Europe, and
improvement in traditional transmission module sales in Europe.
Excluding the impact of currency and the Traction Systems
acquisition, revenues increased approximately 24% from the prior
year. Adjusted EBIT was $61 million, up 91% from $32 million in the
first quarter of 2011.
The company had cash amounting to $396.9 million as of March 31,
2012, a 10.4% increase from $359.6 million as of December 31, 2011.
Total debt increased by $80.9 million to $1.4 billion as of March
31, 2012. Debt (net of cash) to capitalization ratio stood at 27.1%
as of March 31, 2012 compared with 28.3% as of December 31,
2011.
In the quarter, the company had cash flow from operating
activities of $30.8 million compared with cash outflow of $41.4
million in the prior year, mainly driven by an increase in profit.
Capital expenditures, including tooling outlays, increased to $95.0
million from $70.2 million a year ago.
For 2012, BorgWarner expects sales to grow 10% to 12% compared
with 2011. It forecasted earnings per share within the range of
$5.35 to $5.65 for the year.
BorgWarner 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. The company's products are capable of
improving vehicle performance and stability along with fuel
efficiency and emission levels.
The company operates in 59 locations in 19 countries, providing
products that increase fuel efficiency and reduction in emission.
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 AG
(VLKAY), Ford Motor Co. (F), Toyota Motor
Corp. (TM) and Honda Motor Co. (HMC).
Further, demand for the company’s fuel-efficient engines and
transmissions have grown stronger due to more stringent government
regulations. These factors, along with commendable results, have
led the company to retain Zacks #1 Rank on its stock, which
translates into a rating of Strong Buy for the short-term (1 to 3
months).
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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