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Sep 30, 2021
BorgWarner Q3 2021 Earnings Report
BorgWarner reported third quarter results with net sales up 35% and secured awards for North American and German inverter programs.
Key Takeaways
BorgWarner's third quarter 2021 results showed a 35% increase in net sales compared to Q3 2020, driven by the acquisition of Delphi Technologies and increased product demand. The company also secured new inverter program awards with a Global OEM and a German OEM, expecting significant annual revenue by 2025.
Net sales increased by 35% to $3,416 million compared to Q3 2020.
U.S. GAAP net earnings were $0.40 per diluted share, with adjusted net earnings at $0.80 per diluted share.
The company secured an award for a North American inverter program with a Global OEM, expected to launch in 2024.
An 800V SiC inverter award was announced with a German OEM, expected to launch in early 2025.
BorgWarner
BorgWarner
Forward Guidance
For the full-year 2021, BorgWarner expects net sales in the range of $14.4 billion to $14.7 billion, with organic sales increasing by 8.5% to 11%. Adjusted operating margin is expected to be in the range of 9.6% to 10.0%, and adjusted net earnings are expected to be within a range of $3.65 to $3.95 per diluted share. Full-year free cash flow is expected to be in the range of $600 million to $700 million.
Positive Outlook
- Net sales are expected to be in the range of $14.4 billion to $14.7 billion.
- Year-over-year increase in organic sales of 8.5% to 11%.
- Acquisition of AKASOL is expected to increase year-over-year sales by approximately $70 million.
- Foreign currencies are expected to result in a year-over-year increase in sales of approximately $425 million.
- Adjusted net earnings are expected to be within a range of $3.65 to $3.95 per diluted share.
Challenges Ahead
- Semiconductor supply issues could worsen.
- Potential for additional production disruptions arising from COVID-19.
- Weighted light and commercial vehicle markets are expected to be in the range of down approximately 2.5% to flat in 2021.
- Operating margin for the full year is expected to be in the range of 7.9% to 8.7%.
- Capital expenditures, including tooling outlays, affects Free cash flow.