EV-products maker BorgWarner's stock suffers biggest drop in 15 years after downbeat sales outlook

By Tomi Kilgore

Stock leads S&P 500's losers as it closes at a one-year low

Shares of BorgWarner Inc. plunged Thursday after the automotive-products maker missed third-quarter revenue expectations and cut its full-year outlook for sales of electric-vehicle products.

"[W]e're reducing our 2023 eProduct sales outlook by about $300 million," Chief Executive Frédéric Lissalde said on the post-earnings conference call with analysts, according to an AlphaSense transcript. "The two largest drivers of the adjustments [are] announced delays and forecasted slower volume ramp-ups from customers."

He now expects 2023 eProduct sales to rise 40% from a year ago, while previous guidance for sales of $2.3 billion to $2.4 billion implied growth of roughly 53% to 60%.

The stock sank 13.1% to close at a one-year low of $32.26 and was the biggest decliner among the S&P 500 index's SPX components on the day. The stock also suffered its largest one-day percentage selloff since it plummeted 13.7% on Oct. 15, 2008.

Looking longer term, the company also cut 2025 eProduct sales guidance to a range of $4.5 billion to $5 billion from a previously estimated $5.6 billion, as current pressures on electric-vehicle production have the potential to continue for the next couple of years.

For the third quarter, BorgWarner reported net income that fell to $50 million, or 21 cents a share, from $273 million, or $1.15 a share, in the same period a year ago.

Excluding nonrecurring items, such as $77 million in noncomparable expenses, adjusted earnings per share rose to 98 cents from 80 cents, beating the FactSet consensus of 94 cents.

Sales grew 12.3% to $3.62 billion but came up shy of the FactSet consensus of $3.67 billion.

BorgWarner's stock has lost 8.9% year to date, while the S&P 500 has rallied 12.5%.

-Tomi Kilgore

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11-02-23 1621ET

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