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Sep 30, 2023
BorgWarner Q3 2023 Earnings Report
BorgWarner reported Q3 2023 results, highlighting increased sales and eProduct awards.
Key Takeaways
BorgWarner's Q3 2023 results showed a 12% increase in net sales compared to Q3 2022, driven by higher demand and customer recoveries from material cost inflation. The company's adjusted net earnings per diluted share rose to $0.98, up from $0.80 in the prior year. BorgWarner expects its 2023 eProduct sales to be $2.0 billion to $2.1 billion, up from approximately $1.5 billion in 2022.
U.S. GAAP net sales increased by 12% to $3,622 million compared to Q3 2022.
Organic sales, excluding foreign currency and acquisitions, rose by 11% compared to Q3 2022.
U.S. GAAP net earnings were $0.37 per diluted share, with adjusted net earnings at $0.98 per diluted share.
The company updated its full-year sales, margin, and EPS guidance.
Forward Guidance
The Company has updated full year sales, margin and EPS guidance. Net sales for 2023 are expected to be in the range of $14.1 billion to $14.3 billion. Net earnings are expected to be within a range of $2.65 to $2.81 per diluted share. Full-year operating cash is expected to be in the range of $1,200 million to $1,250 million, while free cash flow is expected to be in the range of $400 million to $450 million.
Positive Outlook
- Net sales for 2023 are expected to be in the range of $14.1 billion to $14.3 billion, compared with 2022 sales of approximately $12.6 billion.
- This 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 8.1% to 8.2%.
- Excluding the impact of non-comparable items, adjusted operating margin is expected to be in the range of 9.4% to 9.6%.
- Net earnings are expected to be within a range of $2.65 to $2.81 per diluted share.
Challenges Ahead
- Foreign currencies are expected to result in a year-over-year decrease in sales of approximately $110 million primarily due to the weakening of the Chinese Renminbi against the U.S. dollar, partially offset by the strengthening of the Euro against the U.S. dollar.
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