On Feb. 8, BorgWarner (NYSE:BWA) released fourth-quarter earnings for the period ended Dec. 31.

  • Sales increased 14.7%, thanks to a 20% increase in engine group sales.
  • Net earnings adjusted for noncash charges grew 18.3% in 2006 to $549.1 million.
  • EPS guidance for fiscal 2007 was raised slightly, to a range of $4.70-$4.90 per diluted share.
  • The fourth-quarter dividend was hiked up 6% to $0.17 per share.
  • BWA is rated an outperform by 29 All-Star players in Motley Fool CAPS.

(Figures in millions, except per-share data)

Income Statement Highlights

Q4 2006

Q4 2005

Change

Sales

$1,201.7

$1,048.0

14.7%

Net Profit*

$40.9

$64.6

(36.7%)

EPS

$0.70

$1.12

(37.5%)

Diluted Shares

58.1

57.7

0.7%

*Includes a $73.2 million non-recurring restructuring charge.

Get back to basics with a look at the income statement.

Margin Checkup

Q4 2006

Q4 2005

Change*

Gross Margin

17.7%

19.0%

(1.4)

Operating Margin

1.0%

8.6%

(7.6)

Net Margin

3.4%

6.2%

(2.8)

*Expressed in percentage points.

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets

Q4 2006

Q4 2005

Change

Cash + ST Invest.

$182.4

$130.3

40.0%

Accounts Rec.

$744.0

$626.1

18.8%

Inventory

$386.9

$332.0

16.5%



Liabilities

Q4 2006

Q4 2005

Change

Accounts Payable*

$843.4

$786.4

7.2%

Long-Term Debt

$569.4

$440.6

29.2%

*Accounts Payable includes accrued expenses.

Learn the ways of the balance sheet.

Cash Flow Highlights

2006

2005

Change

Cash From Ops.

$442.1

$396.5

11.5%

Capital Expenditures*

$268.3

$292.5

(8.3%)

Free Cash Flow

$173.8

$104.0

67.1%

*Capital expenditures include tooling outlays.

Find out why Fools always follow the money.

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Related Foolishness:

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