BorgWarner Stock Jumps On Q1 Earnings: Revenues Beat, $500M Buyback, Strong Guidance, And More

BorgWarner Inc. BWA reported first-quarter financial results Thursday before the bell following which the shares started soaring. Here’s a look at the key metrics from the quarter.

Q1 Earnings: The company reported adjusted earnings per share of $1.03, beating the analyst consensus of 87 cents. The company reported quarterly revenues of $3.595 billion, beating the street view of $3.509 billion.

Sales increased 6% year over year primarily due to increased demand for the company’s products, partially offset by the negative impact of foreign currencies.

Gross profit in the quarter under review increased to $644 million from $577 million in the year-ago period. Gross margin expanded to 17.9% from 17.1%.

BorgWarner exited the first quarter with cash and equivalents worth $1.037 billion, with net inventories totaling $1.33 billion.

The company’s long-term debt at the quarter end stood at $3.295 billion.

Buyback Announcement: BorgWarner announced that it has authorized an additional share repurchase program of up to $500 million to be executed over the next three years. 

Combined with the $267 million remaining under the company’s prior authorization, BorgWarner has authorization to repurchase up to $767 million of its outstanding shares.

Outlook: The company raised the FY24 adjusted EPS outlook to $3.80-$4.15 versus the $3.90 estimate (prior view: $3.65-$4.00).

BorgWarner reiterated its net sales outlook for 2024 in the range of $14.4 billion to $14.9 billion (consensus $14.758 billion), implying a year-over-year increase in organic sales of 2% to 5%. 

Operating margin for the full year is expected to be in the range of 8.2% to 8.5% (prior view: 8.5% to 8.9%).

Price Action: BWA shares are trading higher by 7.27% to $35.26 at last check Thursday. 

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