BorgWarner Shares Rise 4% After Beating Earnings Expectations and Raising Guidance

AUBURN HILLS, Michigan - Automotive parts supplier BorgWarner Inc. (NYSE:BWA) shares gained 4% on Thursday after the company reported third-quarter earnings that exceeded analyst expectations and raised its year-end outlook.
The company reported adjusted earnings of $1.09 per share for the quarter, surpassing the consensus estimate of $0.94. Revenue amounted to $3.45 billion, slightly below analysts' projection of $3.5 billion and a 5% decline compared to the same period last year.
Despite facing challenges from a 5.6% decrease in the lightweight and commercial vehicle markets, BorgWarner achieved a 10.1% adjusted operating margin in the third quarter. The company generated $356 million in operating cash flow and $201 million in free cash flow during the quarter.
CEO Frédéric Lissalde stated, "Our strong operational performance in the third quarter, combined with ongoing cost controls and a lower effective tax rate, enabled us to raise our year-end guidance. We are well-positioned to achieve profitable growth while receiving new order bookings across our product portfolio."
BorgWarner raised its adjusted earnings per share forecast for 2024 to a range of $4.15 to $4.30. This outlook exceeds the previous range of $3.95 to $4.15 and the analyst consensus of $4.10. However, the company lowered its revenue guidance to a range of $14.0 to $14.2 billion, down from the prior range of $14.1 to $14.4 billion, citing a weaker market production outlook.
The automotive supplier now expects the lightweight and commercial vehicle markets to shrink by 3.5% to 3% in 2024, a more pessimistic forecast compared to the previous projection of a 3% to 2% decline. BorgWarner anticipates organic sales for the full year to remain flat with a 1.5% decline.
The company executed a $300 million share buyback in the third quarter, bringing the total buyback amount to $400 million year-to-date.