BorgWarner Q4 Results Show Continuing Improvement, New 2023 Guidance; Slight FVE Increase to $79

Narrow-moat-rated BorgWarner reported fourth-quarter earnings per share before special items of $1.26, beating the FactSet consensus by $0.18 and $0.20 higher than last year. Revenue rose 12% to $4.1 billion from $3.7 billion a year ago when the chip shortage was still raging, beating the consensus by 5%. Excluding negative currency, divestitures, and acquisitions, organic revenue jumped 21%, outperforming a 1% increase in global light-vehicle production weighted to BorgWarner's customer base, by 20% points on new business and customer price recoveries for raw materials. We maintain our investment thesis that BorgWarner will increase revenue at above-market rates as its products reduce emissions and support vehicle electrification.