) 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
Operating income declined 3.4% to $192.0 million (excluding
non-recurring items) or 11.3% of net sales from $198.8 million or
11.1% in the third quarter of 2011.
Revenues in the Engine segment ebbed 7.2% to $1.2 billion as
growth in light vehicle turbocharger sales in Asia and North
America as well as engine timing systems sales in Asia were more
than offset by a decline in volumes in Europe due to the economic
Excluding the negative impact of foreign currencies and 2011
dispositions, net sales went up 1% in the region. Adjusted
earnings before interest, income taxes and non-controlling
interest (adjusted EBIT) went down 2.2% to $184.1 million in the
quarter from $188.2 million in the third quarter of 2011.
BORG WARNER INC (BWA): Free Stock Analysis
FORD MOTOR CO (F): Free Stock Analysis Report
HONDA MOTOR (HMC): Free Stock Analysis Report
TOYOTA MOTOR CP (TM): Free Stock Analysis
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Revenues in the Drivetrain segment slipped 1% to $534.4 million
due to the negative impact of currencies. Excluding that impact,
revenues inched up 5% in the segment, driven by strong all-wheel
drive system sales around the world, primarily in North America.
Adjusted EBIT was flat at $44 million compared with the third
quarter of 2011.
BorgWarner had cash and cash equivalents of $621.5 million as of
September 30, 2012 compared with $359.6 million as of December
31, 2011. Total debt at the end of the quarter decreased to $1.1
billion from $1.3 billion as of December 31, 2011. Consequently,
debt-to-capitalization ratio deteriorated to 26.6% from 35.8% as
of December 31, 2011.
In the first nine months of 2012, net cash provided by operating
activities improved to $542.6 million from $473.1 million in the
same period of 2011, mainly driven by higher deferred tax.
Capital expenditures, including tooling outlays, increased to
$283.0 million from $274.1 million in the first nine months of
BorgWarner 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.
BorgWarner is a leading manufacturer of powertrain products for
the world's major automakers. 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 systems. The company's
products are capable of improving vehicle performance and
stability meeting fuel-efficiency and emission standards.
The company operates in 57 locations in 19 countries, providing
products that increase fuel efficiency and reduction in emission.
These products are manufactured and sold worldwide, primarily to
original equipment manufacturers of passenger cars, SUVs, trucks
and commercial transportation products. The company's largest
Ford Motor Co.
Toyota Motor Corp.
Honda Motor Co.
However, the company faces tough competition from its peers, as
any advanced technology developed by them will adversely affect
its business. Currently, it retains a Zacks #3 Rank, which
translates into a short-term (1 to 3 months) Hold rating.