) announced that it expects to earn between $5.15 and $5.45 per
share for 2013. The range is consistent with the Zacks Consensus
Estimate of $5.25 per share and reflects a rise of 15.7%-22.5%
BORG WARNER INC (BWA): Free Stock Analysis
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Further, the company anticipates revenues to go up 2%-6% in the
year based on a 1% rise in global light vehicle production,
offset partially by a 3% fall in European light vehicle
A couple of moths back, the leading manufacturer of powertrain
products for the world's major automakers revealed that it
expects Asia to account for half of its $2.3 billion in new
business from 2013 to 2015, rather than Europe, which is the
market leader in new powertrain technology and currently accounts
for 45% of its business.
The company plans to reduce its exposure in Europe to 30% of new
business due to the economic weakness in the region. The
remaining 20% will be drawn from North America.
Asia accounted for 35% of the company's new business from 2010 to
2012. The company now expects China to account for one-third of
new business in the region.
Stringent fuel economy and emissions standard as well as
advancement in design, manufacturing and materials have boosted
the demand for BorgWarner's products, including dual-clutch
transmissions (DCT) and turbochargers.
The company expects a threefold increase in demand for DCT
modules - which improves fuel efficiency by 15% - to 8 million
units by 2016. Meanwhile, it anticipates global sales of
turbochargers - which improve fuel efficiency by 7.5% according
to the U.S. Department of Energy - to surge 50% to 50 million
units by 2017.
BorgWarner, a Zacks Rank #3 (Hold) stock, posted a 3.5% increase
in profits to $1.19 per share (excluding non-recurring items) in
the third quarter of the year from $1.15 in the same quarter of
2011. The profit was in line with the Zacks Consensus Estimate.
Revenues dipped 5% to $1.7 billion due to a 6% fall in light
vehicle production in Europe, which comprises over half of the
company's ales. However, excluding the impact of foreign
currencies and dispositions in 2011, net sales went up 2% in the
The company revised its 2012 revenues and earnings guidance
downward owing to the economic slowdown in Europe. For the year,
the company anticipates annual sales growth between 0% and 1%
compared with the prior guidance of 4% to 6%. Excluding the
negative impact of foreign currencies, annual net sales growth is
expected between 5% and 6% compared with the prior level of 9% to
The company also expects net earnings between $4.90 and $5.00 per
share for the year, excluding special items, which is lower than
the prior outlook of $5.05 to $5.25 per share. The company stated
that it expects U.S. dollar to euro exchange rate to go down to
$1.25 in 2013 till 2015 from $1.35 over the last three years.
BorgWarner operates in 57 locations in 19 countries, providing
products that increase fuel efficiency and curb emission. Its
products include four-wheel-drive and all-wheel-drive transfer
cases (primarily for light trucks and sport utility vehicles or
SUVs), as well as automatic transmission and timing chain
The company's products are manufactured and sold worldwide,
primarily to original equipment manufacturers of passenger cars,
SUVs, trucks and commercial transportation products. Its largest
Ford Motor Co.
Toyota Motor Corp.
Honda Motor Co.