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 or SUVs), as well as automatic transmission and timing chain systems. These products are produced and sold worldwide, primarily to original equipment manufacturers (OEMs).
BorgWarner is poised to benefit from the acquisition of Gustav Wahler and its general partner as well as its organic expansion. However, pricing pressure from OEMs and intensifying competition could adversely affect the company.
Estimate Trend & Surprise History
Investors should note that the fourth-quarter earnings estimates for BorgWarner have been moving lower over the past 30 days. Consequently, the Zacks Consensus Estimate declined to 75 cents over this period from 77 cents.
However, the company has a track record of delivering positive earnings surprises. It has beaten the Zacks Consensus Estimate in 3 of the trailing 4 quarters with an average beat of around 4.3%. 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 #3 (Hold), 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:
Earnings In-Line, Down Y/Y
BorgWarner reported adjusted earnings of 75 cents per share in the fourth quarter of 2014, in-line with the Zacks Consensus Estimate. Adjusted earnings were lower than 79 cents generated in the year-ago quarter.
Revenues Miss Estimates, Rise Y/Y
BorgWarner logged revenues of $1.99 billion, missing the Zacks Consensus Estimate of $2.01 billion. However, revenues surpassed $1.89 billion posted a year-ago.
Key Stats/Developments to Note
In Nov 2014, BorgWarner opened a new production plant in Viana do Castelo, Portugal to expand its production capacity. This will help the company in meeting the increasing demand for exhaust gas recirculation technologies and glow plug control modules for passenger cars and commercial vehicles. The new plant has 50% larger manufacturing space compared to the previous plant. Moreover, it has provisions for further expansion if required.
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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