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Sep 30, 2022
BorgWarner Q3 2022 Earnings Report
BorgWarner's Q3 2022 results increased compared to Q3 2021.
Key Takeaways
BorgWarner reported a strong third quarter with a 19% increase in net sales compared to the same period last year. The company's adjusted earnings per diluted share also increased, driven by customer pricing actions and higher revenue, partially offset by inflationary impacts and increased R&D investment. BorgWarner is on track to achieve $4 billion in electric vehicle revenue by 2025 and updated its full year sales, margin, and EPS guidance.
Net sales reached $4,060 million, a 19% increase compared to Q3 2021.
Organic sales were up 29% compared to Q3 2021, excluding the impact of foreign currencies, acquisitions, and divestitures.
U.S. GAAP net earnings were $1.16 per diluted share, with adjusted net earnings at $1.24 per diluted share.
The company believes it is already on track to achieve approximately $4 billion of electric vehicle revenue by 2025.
BorgWarner
BorgWarner
Forward Guidance
The Company has updated full year sales, margin and EPS guidance.
Positive Outlook
- Net sales are expected to be in the range of $15.4 billion to $15.7 billion.
- Implies a year-over-year increase in organic sales of 12% to 14%.
- Operating margin for the full year is expected to be in the range of 8.6% to 8.9%.
- Adjusted operating margin is expected to be in the range of 10.0% to 10.2%.
- Net earnings are expected to be within a range of $3.71 to $3.91 per diluted share.
Challenges Ahead
- Foreign currencies are expected to result in a year-over-year decrease in sales of approximately $1 billion.
- The divestiture of the Water Valley, Mississippi business will decrease year-over-year sales by approximately $177 million.
- Net earnings are expected to be within a range of $3.71 to $3.91 per diluted share.
- Full-year operating cash flow is expected to be in the range of $1,450 million to $1,500 million.
- Free cash flow is expected to be in the range of $650 million to $750 million.