BorgWarner (BWA) Down 0.4% Since Last Earnings Report: Can It Rebound?

It has been about a month since the last earnings report for BorgWarner (BWA). Shares have lost about 0.4% in that time frame, underperforming the S&P 500.Will the recent negative trend continue leading up to its next earnings release, or is BorgWarner due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers. BorgWarner Q2 Earnings Beat Estimates, Guidance RevisedBorgWarner reported adjusted earnings of $1.19 per share for second-quarter 2024, down from $1.35 recorded in the prior-year quarter. The bottom line, however, surpassed the Zacks Consensus Estimate of 98 cents.The automotive equipment supplier reported net sales of $3.60 billion, missing the Zacks Consensus Estimate of $3.73 billion. The top line also declined 2% year over year.Segmental PerformanceAir Management: Net sales totaled $1.97 billion in the reported quarter compared with $2.03 billion in the year-ago period. It also missed our estimate of $2.06 billion. Adjusted operating income of $304 million fell from $305 million recorded in the year-ago quarter and also lagged our estimate of $310 million.Drivetrain & Battery Systems: Net sales totaled $1.19 billion in the reported quarter compared with $1.12 billion in the year-ago period and surpassed our projection of $1.17 billion. Adjusted operating income of $176 million increased from $142 million recorded in the year-ago quarter and topped our estimate of $151 million.e-Propulsion: Sales from the segment were $464 million, which declined from $566 million a year ago and missed our estimate of $559.6 million. The segment incurred an adjusted operating loss of $49 million, wider than the operating loss of $19 million in the corresponding period of 2023. The loss was also wider than our estimate of a loss of $33.9 million.Financial PositionAs of Jun 30, 2024, BorgWarner had $1.29 billion in cash/cash equivalents/restricted cash compared with $1.53 billion as of Dec 31, 2023. As of Jun 30, long-term debt was $3.28 billion, down from $3.70 billion recorded as of Dec 31, 2023.Net cash used in operating activities from continuing operations was $462 million in the quarter under review. Capital expenditures and free cash flow totaled $165 million and $297 million, respectively.Revised 2024 GuidanceFor full-year 2024, the company now anticipates net sales in the band of $14.1-$14.4 billion, down from the previous estimate of $14.4-$14.9 billion.The adjusted operating margin is expected in the band of 9.6-9.8%, up from the previous estimate of 9.2-9.6%. Adjusted earnings are now estimated in the range of $3.95-$4.15 per share compared with the previously estimated range of $3.80-$4.15 per share. Operating cash is still estimated in the range of $1,325-$1,375 million. Free cash flow is projected in the band of $475-$575 million.The company expects its eProduct sales to be near the low end of the previous outlook of $2.5-$2.8 billion, up from approximately $2 billion in 2023.How Have Estimates Been Moving Since Then?In the past month, investors have witnessed a downward trend in estimates review.The consensus estimate has shifted -6.03% due to these changes.VGM ScoresCurrently, BorgWarner has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.OutlookEstimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, BorgWarner has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.Performance of an Industry PlayerBorgWarner is part of the Zacks Automotive - Original Equipment industry. Over the past month, Autoliv, Inc. (ALV), a stock from the same industry, has gained 1.4%. The company reported its results for the quarter ended June 2024 more than a month ago.Autoliv reported revenues of $2.61 billion in the last reported quarter, representing a year-over-year change of -1.1%. EPS of $1.87 for the same period compares with $1.93 a year ago.For the current quarter, Autoliv is expected to post earnings of $2.41 per share, indicating a change of +45.2% from the year-ago quarter. The Zacks Consensus Estimate has changed -4.2% over the last 30 days.Autoliv has a Zacks Rank #5 (Strong Sell) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of A.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report BorgWarner Inc. (BWA): Free Stock Analysis Report Autoliv, Inc. (ALV): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks