The 10-second takeaway
For the quarter ended Dec. 31 (Q4), BorgWarner beat slightly on revenue and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue improved significantly and GAAP earnings per share increased.
Gross margin improved, operating margin expanded, and net margin dropped.
BorgWarner logged revenue of $1.79 billion. The 12 analysts polled by S&P Capital IQ hoped for a top line of $1.77 billion on the same basis. GAAP reported sales were 16% higher than the prior-year quarter's $1.53 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
Non-GAAP EPS came in at $1.15. The 17 earnings estimates compiled by S&P Capital IQ averaged $1.04 per share on the same basis. GAAP EPS of $1.00 for Q3 were 11% higher than the prior-year quarter's $0.90 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 20.3%, 30 basis points better than the prior-year quarter. Operating margin was 10.8%, 30 basis points better than the prior-year quarter. Net margin was 6.9%, 40 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $1.83 billion. On the bottom line, the average EPS estimate is $1.17.
Next year's average estimate for revenue is $7.16 billion. The average EPS estimate is $4.42.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 359 members out of 391 rating the stock outperform, and 32 members rating it underperform. Among 131 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 125 give BorgWarner a green thumbs-up, and six give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on BorgWarner is outperform, with an average price target of $83.47.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Motley Fool newsletter services have recommended buying shares of BorgWarner. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.