) posted a 2.5% decrease in profits to $1.16 per share (excluding
non-recurring items) in the fourth quarter of 2012 from $1.19 in
the same quarter of 2011. However, EPS in the quarter surpassed
the Zacks Consensus Estimate by 4 cents.
BORG WARNER INC (BWA): Free Stock Analysis
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Revenues dipped 3.1% to $1.72 billion, but were ahead of the
Zacks Consensus Estimate of $1.69 billion. Global light vehicle
production inched up 1%, while production in Europe, which
comprises over half of the company's sales, declined 11%.
Excluding the impact of foreign currencies and dispositions in
2011 and 2012, revenues remained flat year over year.
Operating income declined 11.7% to $188.0 million or 10.9% of net
sales from $212.8 million or 12.0% in the fourth quarter of 2011
(all excluding non-recurring items).
BorgWarner reported a profit of $4.97 per share for 2012, up
11.7% from $4.45 a year ago. The company's revenues for the year
edged up 1% to $7.2 billion. Excluding the impact of foreign
currencies and dispositions, net sales went up 6% in the year.
Revenues in the
segment dropped 6.3% to $1.2 billion as increase in light vehicle
turbocharger sales in China and variable cam timing systems sales
in Japan were more than offset by lower volumes in Europe due to
the economic weakness.
Excluding the negative impact of foreign currencies and
dispositions, net sales went down 2%. Adjusted earnings before
interest, income taxes and non-controlling interest (adjusted
EBIT) decreased 10.3% to $182.0 million in the quarter from
$202.8 million in the fourth quarter of 2011.
Revenues in the
segment increased 4.7% to $559.0 million on better sales volume
of all-wheel drive system in North America and India together
with improved sales of traditional transmission components in
Korea. Excluding the impact of foreign currency, revenues went up
5% in the segment. Adjusted EBIT increased 5.1% to $49.2 million
from $46.8 million in the fourth quarter of 2011.
In the fourth quarter of 2012, BorgWarner repurchased 1.5 million
shares. For the full year 2012, the company repurchased 4.2
million shares of common stock.
BorgWarner had $715.7 million in cash as of Dec 31, 2012 compared
with $359.6 million as of Dec 31, 2011. Total debt including
notes payable at the end of the quarter decreased to $1.1 billion
from $1.3 billion as of Dec 31, 2011. Consequently,
debt-to-capitalization ratio deteriorated to 25.7% from 35.8% as
of Dec 31, 2011.
For full year 2012, net cash provided by operating activities
improved to $878.7 million from $708.2 million in 2011. Capital
expenditures, including tooling outlays, increased to $407.4
million from $393.7 million in 2011.
For 2013, BorgWarner anticipates annual sales growth between 2%
and 6% compared with 2012. Excluding the impact of 2012
dispositions, net sales growth is expected between 3% and 7%.
The company also expects net earnings between $5.15 and $5.45 per
share for the year. It expects operating margin to be higher than
11.5% in 2013.
BorgWarner is a leading manufacturer of powertrain products for
the world's major automakers. The company's products are capable
of improving vehicle performance and stability meeting
fuel-efficiency and emission standards. It currently retains a
Zacks Rank #3 (Hold).
The company operates in 57 locations in 19 countries. 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
customers include F
ord Motor Co.
Toyota Motor Corp.
Honda Motor Co.