AUBURN HILLS, Mich. - BorgWarner Inc. (NYSE: NYSE:BWA), a global product leader in clean and efficient technology solutions for combustion, hybrid, and electric vehicles, has reported a 6% increase in net sales for the first quarter of 2024 compared to the same period last year.
The company announced net sales of $3,595 million, up from $3,383 million in the first quarter of 2023, attributing the growth primarily to heightened demand for its products, despite the negative impact of foreign currencies.
The company's net earnings per diluted share were $0.93, with adjusted net earnings per diluted share at $1.03, up from $0.81 in the first quarter of 2023. This increase is credited to higher sales, a lower effective tax rate, and a reduced share count. BorgWarner has also authorized an additional share repurchase program of up to $500 million to be executed over the next three years, adding to the $267 million remaining from the prior authorization.
BorgWarner's eProduct sales for 2024 are projected to be between $2.5 billion and $2.8 billion, an increase from approximately $2.0 billion in 2023. The company expects net sales for the full year to range from $14.4 billion to $14.9 billion.
The operating margin is anticipated to be between 8.2% and 8.5%, with adjusted operating margin ranging from 9.2% to 9.6%. Net earnings per diluted share are forecasted to be between $3.54 and $3.86, with adjusted figures expected to be from $3.80 to $4.15 per diluted share.
BorgWarner also highlighted new business wins, including contracts with XPeng (NYSE:XPEV) for high voltage hairpin eMotor systems and with Polestar (NASDAQ:PSNY) and a major European OEM for electric Torque Vectoring Disconnect systems. Production for these contracts is set to begin in 2025 and later in 2024, respectively.
The company's free cash flow was reported at $(308) million, with net cash used in operating activities at $118 million. These financial results, based on a press release statement, reflect the company's continuing operations and are presented excluding certain non-comparable items detailed in the provided tables.
BorgWarner remains a transformative force in the automotive industry, emphasizing its commitment to accelerating the transition to eMobility for a cleaner and safer future. The company's forward-looking statements indicate management's current outlook and are subject to various risks and uncertainties.
InvestingPro Insights
BorgWarner Inc. (NYSE: BWA) showcases resilience in its financial performance, with recent data from InvestingPro underscoring key aspects of the company's fiscal health and market position. The company's market capitalization stands at a robust $7.59 billion, reflecting investor confidence in its business model and market strategy.
BorgWarner's Price to Earnings (P/E) ratio, a critical measure of the company's valuation, is currently at a favorable 12.44, dipping to an even more attractive 9.55 when adjusted for the last twelve months as of Q4 2023. This suggests a potentially undervalued stock, especially when considering the company's profitability over the same period.
On the growth front, BorgWarner has experienced a healthy revenue increase of 12.37% over the last twelve months as of Q4 2023, with a quarterly uptick of 6.18% in Q1 2024. This aligns with the company's reported sales growth in the latest quarter, signaling sustained momentum. Notably, the company's gross profit margin is at 18.09%, which, despite being identified as a weak spot by InvestingPro Tips, doesn't overshadow the company's capacity to generate earnings.
InvestingPro Tips further highlight BorgWarner's financial prudence and stability. The company can comfortably cover its interest payments with its cash flows, a reassuring sign for investors concerned with financial solvency.
Moreover, the firm has maintained its dividend payments for 12 consecutive years, which, combined with a dividend yield of 1.34%, can be attractive for income-focused investors. Moreover, BorgWarner's liquid assets surpass its short-term obligations, indicating a solid liquidity position that can support operational and strategic flexibility.
For comprehensive insights and additional InvestingPro Tips, investors can explore the full suite of analytics and forecasts on InvestingPro. Currently, there are 6 more tips available that could provide deeper analysis and aid in making informed investment decisions. To access these insights, readers can use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.