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Jun 30, 2024
BorgWarner Q2 2024 Earnings Report
BorgWarner reported strong second-quarter margin and free cash flow, which led to increased full-year adjusted operating margin and EPS guidance.
Key Takeaways
BorgWarner's Q2 2024 results showed an adjusted operating margin of 10.4% and free cash flow of $297 million. The company increased its full-year adjusted operating margin guidance by 30 basis points and adjusted earnings per share guidance by approximately $0.07 per share. Net sales were $3,603 million, a decrease of 2% compared to Q2 2023.
Achieved an adjusted operating margin of 10.4% and a U.S. GAAP operating margin of 8.2%.
Generated $462 million in net cash from operating activities and $297 million in free cash flow.
Increased mid-point full year adjusted operating margin guidance by 30 basis points and adjusted earnings per share guidance by approximately $0.07 per share.
Intends to repurchase $300 million of the Company’s outstanding shares during the second half of 2024.
BorgWarner
BorgWarner
BorgWarner Revenue by Segment
Revenue by Segment
Turbos & Thermal Revenue
CapyFin.comDrivetrain & Morse Revenue
CapyFin.comPowerDrive Revenue
CapyFin.comBattery & Charging Revenue
CapyFin.com Forward Guidance
The Company has updated full year sales, margin and EPS guidance.
Positive Outlook
- Net sales for 2024 are expected to be in the range of $14.1 billion to $14.4 billion.
- The Company’s sales guidance implies a year-over-year increase in organic sales of approximately 0.5% to 2.5%.
- The Company expects its 2024 eProduct sales to be near the low-end of the Company’s prior $2.5 billion to $2.8 billion guidance, up from approximately $2.0 billion in 2023.
- Adjusted operating margin is expected to be in the range of 9.6% to 9.8%, up from the Company’s prior guidance of 9.2% to 9.6%.
- Adjusted net earnings are expected to be within a range of $3.95 to $4.15 per diluted share, up from the Company’s prior guidance of $3.80 to $4.15 per diluted share.
Challenges Ahead
- Net sales for 2024 are expected to be in the range of $14.1 billion to $14.4 billion, compared to the Company’s prior guidance of $14.4 billion to $14.9 billion.
- The Company expects its weighted light and commercial vehicle markets to be in the range of down 3% to down 2% year-over-year in 2024, a decrease from the Company’s prior guidance of flat to down 2.5%.
- The Company expects its 2024 eProduct sales to be near the low-end of the Company’s prior $2.5 billion to $2.8 billion guidance
- Foreign currencies are expected to result in a year-over-year decrease in sales of approximately $175 million primarily due to the weakening of the Chinese Renminbi, the Korean Won and the Euro against the U.S. dollar.
- Operating margin for the full year is expected to be in the range of 8.2% to 8.3%.
Revenue & Expenses
Visualization of income flow from segment revenue to net income