Why BorgWarner Shares Are Falling Today

BorgWarner Inc. BWA shares are trading lower on Thursday after it reported fourth-quarter results.

Adjusted earnings per share of 90 cents missed the estimate of 94 cents. Quarterly revenues of $3.52 billion missed the street view of $3.65 billion.

Revenues rose 6.2% year over year, primarily due to increased demand for the company’s products and higher industry production compared to the prior year. 

Meanwhile, BorgWarner has begun eMotor rotor and stator production for XPeng Inc. XPEV, a Chinese Smart EV company. 

The product will be used on the X9 MPV as well as XPeng’s next electric B-class sedan, with the start of production planned for the third quarter of 2024. 

The high voltage hairpin (HVH) 220 eMotor offers high power and torque density, plus higher efficiency at a competitive cost. It also provides outstanding durability, the company said.

The company declared a quarterly cash dividend of 11 cents per share of common stock. The dividend is payable on March 15, 2024.

BorgWarner exited the fourth quarter with cash and equivalents worth $1.534 billion. Long-term debt as of quarter end pegs at $3.707 billion.

Outlook: BorgWarner expects FY24 net sales of $14.4 billion-$14.9 billion vs. $15.3 billion estimate.

The company expects its 2024 eProduct sales to be $2.5 billion to $2.8 billion. Foreign currencies are expected to have a minimal year-over-year impact on full-year 2024 sales.

Operating margin is expected to be in the range of 8.5% to 8.9%. The company sees adjusted EPS of $3.65-$4.00 vs. $4.27 estimate.

Full-year operating cash flow is expected to be $1.325 billion to $1.375 billion, while free cash flow is expected to be $475 million to $575 million.

Price Action: BWA shares are trading lower by 6.62% to $31.59 on the last check Thursday.

Photo via Wikimedia Commons