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BorgWarner Inc BWA

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BorgWarner Reports Solid Q3 Rebound Returning to Year-Over-Year Growth; Maintaining $64 FVE

Richard Hilgert Senior Equity Analyst

Analyst Note

| Richard Hilgert |

BorgWarner reported third-quarter earnings per share before special items of $0.88, ahead of the $0.79 CapIQ consensus EPS estimate by $0.09 but $0.08 below the year-ago result due to a higher effective tax rate. Consolidated revenue returned to growth, increasing 1.7% to $2.5 billion but would have been up 0.8% excluding favorable currency effect. Sequentially from second to third quarter, revenue rebounded 78%. Adjusted EBIT was $317 million with a margin of 12.5% versus $294 million and an 11.8% margin reported last year, a solid result considering the lingering effects of coronavirus. The acquisition of Delphi was closed on the first day of the fourth quarter and is not included in third-quarter results, except for $16 million in merger related expenses excluded from adjusted EBIT.

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Company Profile

Business Description

BorgWarner is a Tier I auto-parts supplier that has two operating segments. The engine group makes turbochargers, emissions system components, timing chains, and other items that enhance fuel efficiency and reduce emissions. Drivetrain group produces rotating electrical components, power electronics, control modules, transmission components, and four-wheel-drive/all-wheel-drive system components that facilitate the distribution of engine torque to the wheels. The acquisition of Delphi adds fuel-injection as well as inverter/converter and electronic control modules for electrified powertrain.

3850 Hamlin Road
Auburn Hills, MI, 48326
T +1 248 754-9200
Sector Consumer Cyclical
Industry Auto Parts
Most Recent Earnings Sep 30, 2020
Fiscal Year End Dec 31, 2020
Stock Type Cyclical
Employees 29,000