Shares of BorgWarner Inc. (BWA) hit a new 52-week high of $82.84 on May 9, which is above its previous level of $80.10, and closed at $81.77on the same date. Their last closing price was $82.22, which represented a one-year return of 6.4% and year-to-date return of 10.3%.
The leading manufacturer of powertrain products for the world’s major automakers has a market cap of $9.5 billion. Average volume of shares traded over the last three months stood at approximately 1,019.7K.
Shares of the company started escalating following its impressive 2013-first quarter results on Apr 25. The company posted a 1.6% increase in adjusted earnings to $1.30 per share (excluding non-recurring items) in the first quarter of 2013 from $1.28 in the first quarter of 2012. Earning per share surpassed the Zacks Consensus Estimate by 8 cents.
However, revenues dipped 3.2% to $1.85 billion, but were marginally ahead of the Zacks Consensus Estimate of $1.84 billion. The decrease in revenues was driven by a 9% decline in light vehicle production in Europe, which accounts for over half of the company’s sales. Global light vehicle production went down 1%. Excluding the impact of foreign currencies and dispositions in 2012, revenues declined 1% year over year.
Operating income (excluding non-recurring items) declined 4.3% to $216.0 million or 11.7% of net sales from $225.7 million or 11.8% in the first quarter of 2012.
For 2013, BorgWarner anticipates that annual sales will improve between 2% and 6%. Excluding the impact of 2012 dispositions, net sales are expected to increase between 3% and 7%.
The company also expects net earnings between $5.15 and $5.45 per share for the year and operating margin to be higher than 11.5% in 2013.
BorgWarner’s products are capable of improving vehicle performance and stability meeting fuel-efficiency and emission standards. It currently retains a Zacks Rank #3 (Hold).
The company operates in 57 locations in 19 countries. These products are manufactured and sold worldwide, primarily to original equipment manufacturers of passenger cars, SUVs, trucks and commercial transportation products. The company’s largest customers include Ford Motor Co. (F), Toyota Motor Corp. (TM) and Honda Motor Co. ( HMC) .
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