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BorgWarner's (BWA) Q1 Earnings Beat Estimates, Rise Y/Y

BorgWarner, Inc. BWA is a leading manufacturer of powertrain products for major automakers. Its products include four-wheel-drive and all-wheel-drive transfer cases (primarily for light trucks and sport utility vehicles), as well as automatic transmission and timing chain systems. These products are produced and sold worldwide, primarily to original equipment manufacturers.

BorgWarner is poised to benefit from strong demand, global expansion, capital deployment and restructuring of the Drivetrain segment. However, negative impact from foreign currencies, pricing pressure from OEMs and intensifying competition could adversely affect the company.

Estimate Trend & Surprise History

Investors should note that the first-quarter earnings estimates for BorgWarner have increased by a penny to 79 cents over the past 30 days.

Meanwhile, the company has a weak record in terms of earnings surprises. It has missed the Zacks Consensus Estimate in two of the trailing four quarters. Consequently, BorgWarner has a negative average surprise of around 2.45% over the last four quarters.

Investors have been eagerly awaiting BorgWarner’s latest earnings report to see whether it delivers an earnings beat in the fourth quarter.

Zacks Rank

BorgWarner currently has a Zacks Rank #2 (Buy), but that could change following its earnings report which was just released. We have highlighted some of the key stats from this Michigan-based company’s earnings announcement below:


BorgWarner reported adjusted earnings of 80 cents per share in the first quarter of 2016, beating the Zacks Consensus Estimate of 79 cents. Adjusted earnings increased 2.6% from 78 cents reported in the year-ago quarter.


BorgWarner logged revenues of $2.27 billion, marginally beating the Zacks Consensus Estimate of $2.25 billion. Further, revenues were 14.3% higher than $1.98 billion posted a year-ago.

Key Stats/Developments to Note
Net sales for 2016 are projected to grow 12.7%–17.5%. Excluding the impact of foreign currencies and the Remy International acquisition, net sales are expected to grow around 2.5%–5.5%.

Further, BorgWarner expects net earnings in the range of $3.11–$3.32 per share in 2016. The Remy International acquisition is likely to have a positive impact of 12 cents per share.

Market Reaction
BorgWarner’s shares were inactive following the release.  It would be interesting to see how the market reacts to the results during the trading session today.

Check back later for our full write up on BorgWarner’s earnings report!

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