Updates full year guidance, provides guidance for second quarter
BorgWarner Inc. (NYSE: BWA) today reported first quarter results.
First Quarter Highlights:
- U.S. GAAP net sales of $2,269 million, up 14.3% compared with first quarter 2015.
– Excluding the impact of foreign currencies and the Remy acquisition, net sales were up 4.5% compared with first quarter 2015. - U.S. GAAP net earnings of $0.75 per diluted share.
– Excluding the $(0.05) per diluted share related to net non-comparable items (detailed in the table below), net earnings were $0.80 per diluted share, of which $0.03 per diluted share were contributed by the Remy acquisition. - U.S. GAAP operating income of $264 million.
– Excluding the $12 million of pretax expenses related to non-comparable items, operating income was $276 million, of which $11 million was contributed by the Remy acquisition. Excluding the impact of non-comparable items, operating income was 12.2% of net sales. Excluding the impact of noncomparable items and the Remy acquisition, operating income was 13.2% of net sales.
Full Year 2016 Guidance: The company has updated its 2016 full year guidance. Net sales growth is now expected to be within a range of 12.7% to 17.5% compared with 2015. Excluding the impact of foreign currencies and the Remy acquisition, net sales growth is still expected to be within a range of 2.5% to 5.5%. Net earnings are still expected to be within a range of $3.11 to $3.32 per diluted share, of which approximately $0.12 per diluted share are expected to be contributed by the Remy acquisition. Excluding the impact of non-comparable items, operating income, as a percentage of net sales, is still expected to be above 12%. Excluding the impact of non-comparable items and the Remy acquisition, operating income, as a percentage of net sales, is still expected to be above 13%.
Second Quarter 2016 Guidance: Second quarter 2016 net sales growth is expected to be within a range of 10.6% to 16.0% compared with second quarter 2015. Excluding the impact of foreign currencies and the Remy acquisition, net sales growth is expected to be within a range of 1.5% to 4.8%. Net earnings are expected to be within a range of $0.78 to $0.83 per diluted share, of which approximately $0.03 per diluted share are expected to be contributed by the Remy acquisition. Excluding the impact of noncomparable items, operating income, as a percentage of net sales, is expected to be approximately 12%. Excluding the impact of non-comparable items and the Remy acquisition, operating income, as a percentage of net sales, is expected to be approximately 13%.
Second Quarter 2016 Guidance: Second quarter 2016 net sales growth is expected to be within a range of 10.6% to 16.0% compared with second quarter 2015. Excluding the impact of foreign currencies and the Remy acquisition, net sales growth is expected to be within a range of 1.5% to 4.8%. Net earnings are expected to be within a range of $0.78 to $0.83 per diluted share, of which approximately $0.03 per diluted share are expected to be contributed by the Remy acquisition. Excluding the impact of noncomparable items, operating income, as a percentage of net sales, is expected to be approximately 12%. Excluding the impact of non-comparable items and the Remy acquisition, operating income, as a percentage of net sales, is expected to be approximately 13%.
Net cash provided by operating activities was $34 million in first quarter 2016 compared with $33 million in first quarter 2015. Investments in capital expenditures, including tooling outlays, totaled $104 million in first quarter 2016, compared with $140 million in first quarter 2015. Balance sheet debt increased by $48 million and cash decreased by $185 million at the end of first quarter 2016 compared with the end of 2015. The company’s net debt to net capital ratio was 37.0% at the end of first quarter 2016 compared with 35.2% at the end of 2015.
Engine Segment Results: Engine segment net sales were $1,399 million in first quarter 2016 compared with $1,381 million in first quarter 2015. Excluding the impact of foreign currencies, primarily the Euro, net sales were up 4.5% from the prior year’s quarter. Adjusted earnings before interest, income taxes and non-controlling interest (“Adjusted EBIT”) were $233 million in first quarter 2016. Excluding the impact of foreign currencies, Adjusted EBIT was $240 million, up 4.2% from first quarter 2015.
Drivetrain Segment Results: Drivetrain segment net sales were $879 million in first quarter 2016 compared with $611 million in first quarter 2015. Excluding the impact of foreign currencies, primarily the Euro, and the Remy acquisition, net sales were up 4.8% from the prior year’s quarter. Adjusted EBIT was $84 million in first quarter 2016. Excluding the impact of foreign currencies, and the Remy acquisition, Adjusted EBIT was $76 million, up 6.4% from first quarter 2015.
Recent Highlights:
BorgWarner’s eGearDrive® transmission will propel the Geely EC7-EV sedan, the Chinese automaker’s first mass-produced electric vehicle. Specifically designed for the emerging highvolume electric vehicle market, BorgWarner’s eGearDrive transmission features a highlyefficient gear train for extended range and quiet performance, and is available in a wide range of ratios for a variety of motor sizes.
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