BorgWarner Inc. Earnings: Margins Expand For Fifth Straight Quarter, Net Income Rises

BorgWarner Inc. (NASDAQ:BWA) reported its results for the first quarter. BorgWarner is a global supplier of engineered automotive systems and components, mainly for powertrain applications.

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BorgWarner Earnings Cheat Sheet for the First Quarter

Results: Net income for BorgWarner Inc. rose to $158 million ($1.28 per share) vs. $124.5 million ($1 per share) in the same quarter a year earlier. This marks a rise of 26.9% from the year-earlier quarter.

Revenue: Rose 10.5% to $1.91 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: BorgWarner Inc. was about in line with expectations as the mean analyst estimate of $1.29 per share. Analysts were expecting revenue of $1.94 billion.

Quoting Management: “The first quarter was a strong start to the year,” said Timothy Manganello, Chairman and CEO of BorgWarner. “The focus on fuel economy and improved emissions around the globe continued to drive demand for BorgWarner technology, and above-market growth for our company.”

Key Stats:

The company has seen double-digit year-over-year percentage revenue growth for the past five quarters. Over that span, the company has averaged growth of 23.1%, with the biggest boost coming in the first quarter of the last fiscal year when revenue rose 34.5% from the year earlier quarter.

Last quarter marked the fifth consecutive quarter of increasing gross margins, as the company’s gross margin expanded 0.9 percentage point from the year-earlier quarter to 20.7%. During this time, margins have grown an average of 0.6 percentage point per quarter on a year-over-year basis.

The company has now seen its net income rise for three quarters in a row. In the fourth quarter of the last fiscal year, net income rose 9.2% and in the third quarter of the last fiscal year, the figure rose 32.7%.

The company fell short of forecasts after beating estimates in the previous two quarters. In the fourth quarter of the last fiscal year, it topped the mark by 3 cents, and in the third quarter of the last fiscal year, it was ahead by 10 cents.

Looking Forward: Expectations for the company’s next-quarter performance are higher than they were ninety days ago. Over the past three months, the average estimate for the second quarter has risen to $1.40 per share from $1.33. The average estimate for the fiscal year is $5.50 per share, a rise from $5.44 ninety days ago.

(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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