The 10-second takeaway
For the quarter ended March 31 (Q1), BorgWarner met expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue dropped. Non-GAAP earnings per share grew slightly. GAAP earnings per share contracted.
Margins dropped across the board.
BorgWarner tallied revenue of $1.85 billion. The 15 analysts polled by S&P Capital IQ expected to see sales of $1.83 billion on the same basis. GAAP reported sales were the same as the prior-year quarter's.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $1.30. The 20 earnings estimates compiled by S&P Capital IQ predicted $1.24 per share. Non-GAAP EPS of $1.30 for Q1 were 1.6% higher than the prior-year quarter's $1.28 per share. GAAP EPS of $1.22 for Q1 were 4.7% lower than the prior-year quarter's $1.28 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 20.2%, 50 basis points worse than the prior-year quarter. Operating margin was 10.7%, 110 basis points worse than the prior-year quarter. Net margin was 7.7%, 60 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $1.90 billion. On the bottom line, the average EPS estimate is $1.37.
Next year's average estimate for revenue is $7.49 billion. The average EPS estimate is $5.33.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 406 members out of 440 rating the stock outperform, and 34 members rating it underperform. Among 124 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 118 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 $82.75.
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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. The Motley Fool recommends 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.