BorgWarner Q4 2022 Earnings Report
Key Takeaways
BorgWarner reported a strong fourth quarter in 2022, with net sales increasing by 12.4% to $4,108 million and adjusted net earnings per diluted share rising to $1.26. The company's performance benefited from higher demand for its products and effective commercial negotiations, which helped offset increased commodity costs and investments in e-Products R&D.
Net sales reached $4,108 million, a 12.4% increase compared to Q4 2021.
Organic sales increased by 21.3% year-over-year, excluding the impact of foreign currencies and net MD&A.
GAAP net earnings were $1.09 per diluted share, while adjusted net earnings reached $1.26 per diluted share.
The company anticipates electric vehicle sales to grow to $1.5 billion to $1.8 billion in 2023.
BorgWarner
BorgWarner
Forward Guidance
BorgWarner provided its full year 2023 guidance, expecting net sales to be in the range of $16.7 billion to $17.5 billion, implying a year-over-year organic increase in sales of 7% to 12%. Adjusted net earnings are expected to be within a range of $4.50 to $5.00 per diluted share, and free cash flow is projected to be between $550 million and $650 million.
Positive Outlook
- Net sales are expected to be in the range of $16.7 billion to $17.5 billion.
- Implies a year-over-year organic increase in sales of 7% to 12%.
- Operating margin is expected to be in the range of 8.6% to 9.0%.
- Adjusted operating margin is expected to be in the range of 10.0% to 10.4%.
- Adjusted net earnings are expected to be within a range of $4.50 to $5.00 per diluted share.
Challenges Ahead
- Foreign currencies are expected to result in a year-over-year decrease in sales of approximately $285 million.
- Free cash flow is expected to include estimated one-time cash costs of $150 million associated with the planned separation of Fuel Systems and Aftermarket businesses.
- Weighted light and commercial vehicle markets are expected to increase in the range of approximately 0% to 3% in 2023.
- Restructuring expense $40 to $50 million.
- Separation expense $90 to $100 million.