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BorgWarner (BWA) to Report Q2 Earnings: What's in Store?

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BorgWarner Inc. BWA is slated to release second-quarter 2021 results on Aug 4, before the bell. The Zacks Consensus Estimate for the quarter’s earnings is pegged at 79 cents per share on revenues of $3.5 billion.

This automotive equipment supplier registered higher-than-anticipated earnings in the last reported quarter on outstanding contributions from the Air Management and e-Propulsion & Drivetrain segments.

Over the preceding four quarters, the company exceeded estimates on all occasions, the average beat being 38.3%. This is depicted in the graph below:

BorgWarner Inc. Price and EPS Surprise

BorgWarner Inc. Price and EPS Surprise
BorgWarner Inc. Price and EPS Surprise

BorgWarner Inc. price-eps-surprise | BorgWarner Inc. Quote

Trend in Estimate Revisions

The Zacks Consensus Estimate for BorgWarner’s second-quarter earnings per share witnessed a downward revision of two cents to 79 cents in the past 30 days. Nonetheless, this compares favorably with the year-ago quarter’s loss of 14 cents per share, indicating a whopping growth of 664.3% year on year. Further, the Zacks Consensus Estimate for quarterly revenues suggests a year-over-year jump of 145.2%.

Earnings Whispers

Our proven Zacks model does not conclusively predict an earnings beat for BorgWarner this time around. The combination of a positive Earnings ESP, and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), increases the odds of an earnings beat. However, that is not the case here as elaborated below.

Earnings ESP: BorgWarner has an Earnings ESP of -0.32%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: BorgWarner currently holds a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Factors at Play

The Zacks Consensus Estimate for BorgWarner’s Air Management segment’s sales is pegged at $1,582 million, for the period in discussion, suggesting a fall from the $2,011 million reported in the prior quarter. In addition, the consensus mark for the segment’s EBIT is pinned at $223 million, calling for a slump from the $322 million seen in the first quarter of 2021.

The consensus mark for quarterly sales from the e-Propulsion & Drivetrain segment is pegged at $1,201 million, suggesting a drop from the $1,466 million registered in the last quarter. The same for the segmental EBIT is $97 million, indicating a plunge from the prior quarter’s $137 million.

The consensus mark for quarterly sales from the Fuel Injection unit is pegged at $473 million, calling for a marginal fall from the $475 million witnessed in the prior quarter.

Nonetheless, the consensus mark for quarterly sales from the Aftermarket unit is pinned at $200 million, indicating an improvement from the $197 million recorded in the March-end quarter.

While the projected declines in revenue and earnings across all major segments might have hurt the company’s performance during the quarter under review, BorgWarner is likely to have benefited from the accelerating vehicle electrification efforts and progress made on project Charging Forward during the quarter.

Stocks to Consider

Here are a few stocks lined up to release quarterly results soon. Encouragingly, our model predicts earnings beats for these stocks:

ParkerHannifin Corporation PH has an Earnings ESP of +1.33% and carries a Zacks Rank #3, currently. The company is scheduled to report quarterly numbers on Aug 5.

Fox Factory Holding Corp. FOXF has an Earnings ESP of +1.15% and carries a Zacks Rank #2, at present. It is slated to report earnings results on Aug 5.

Lear Corporation LEA has an Earnings ESP of +3.05% and carries a Zacks Rank of 3, currently. The company is set to announce quarterly figures on Aug 6.


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ParkerHannifin Corporation (PH) : Free Stock Analysis Report

BorgWarner Inc. (BWA) : Free Stock Analysis Report

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Fox Factory Holding Corp. (FOXF) : Free Stock Analysis Report

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