BorgWarner Reports Mixed Q3 Results, Cuts FY21 Outlook

  • BorgWarner Inc BWA reported third-quarter FY21 sales growth of 35% year-on-year, to $3.416 billion, missing the analyst consensus of $3.43 billion. Organic sales were down 7%.
  • Net sales from the Air Management segment rose 13.2% Y/Y, and the e-Propulsion & Drivetrain Segment gained 13.8%.
  • Gross profit rose 25.7% to $650 million, and gross margin contracted 140 basis points to 19%.
  • The operating margin was 7.4%, and the operating income fell 10.9% Y/Y to $253 million.
  • BorgWarner held $1.5 billion in cash and equivalents as of September 30, 2021. Net cash provided by operating activities for the quarter amounted to $142 million with a free cash flow of $(10) million.
  • Adjusted EPS of $0.80 beat the analyst consensus of $0.72.
  • Outlook: BorgWarner has cut FY21 sales guidance to $14.4 billion - $14.7 billion (prior view $15.2 billion - $15.6 billion), versus the consensus of $14.83 billion.
  • The company expects FY21 adjusted EPS of $3.65 - $3.95 (prior outlook $4.15 - $4.40), versus the consensus of $3.91.
  • It sees operating margin of 7.9% - 8.7% (prior view 8.7% - 9.3%).
  • Price Action: BWA shares are trading lower by 0.47% at $46.83 in premarket on the last check Wednesday.
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