BorgWarner Inc. Announces Earnings Guidance for the First Quarter and Full Year of 2016
January 13, 2016 at 08:30 am EST
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BorgWarner Inc. announced earnings guidance for the first quarter and full year of 2016. For the first quarter of 2016, the company expects net sales growth of 8.3% to 13.3% compared with first quarter 2015 net sales of $1,984 million. Foreign currencies are expected to lower sales by $76 million to $47 million, or -3.8% to -2.4%. The Remy acquisition is expected to increase sales by $247 million to $257 million, or 12.4% to 13.0%. Excluding the impact of weaker foreign currencies and the Remy acquisition, net sales growth is expected to be -0.3% to 2.7%. Net earnings expected to be in the range of $0.75 to $0.79 per diluted share. The Remy acquisition is expected to increase earnings by $0.03 per diluted share. Excluding the impact of the Remy acquisition, net earnings are expected to be $0.72 to $0.76 per diluted share, down -8% to -2% compared with first quarter 2015 net earnings of $0.78 per diluted share, excluding non-recurring items. Operating income expected as a percentage of net sales over 12%. Excluding the impact of the Remy acquisition, operating income, as a percentage of net sales, is expected to be above 13%.
For the full year of 2016, the company expects net sales growth of 13.2% to 18.3% compared with the midpoint of 2015 net sales guidance of $7,848 million. Foreign currencies are expected to lower sales by $177 million to $59 million, or -2.3% to -0.8%. The Remy acquisition is expected to increase sales by $1,020 million to $1,060 million, or 13.0% to 13.5. Excluding the impact of weaker foreign currencies and the Remy acquisition, net sales growth is expected to be 2.5% to 5.5%. Net earnings expected to be in the range Of $3.11 to $3.32 per diluted share. The Remy acquisition is expected to increase earnings by approximately $0.13 per diluted share. Excluding the impact of the Remy acquisition, net earnings are expected to be $2.98 to $3.18 per diluted share, up 0.2% to 6.7% compared with the midpoint of 2015 net earnings guidance of $2.95 to $3.00 per diluted share, excluding non-recurring items. Foreign currencies are expected to lower net earnings by $0.07 to $0.02 per diluted share, or -2.3% to -0.6%. Operating income expected as a percentage of net sales above 12%. The Remy acquisition is expected to lower operating income as a percentage of net sales by approximately 100 basis points. Excluding the impact of the Remy acquisition, operating income, as a percentage of net sales, is expected to be above 13%. Effective tax rate of approximately 30%. Free cash flow within a range of $400 million to $475 million.
BorgWarner Inc. specializes in the design, manufacturing, and marketing of automotive equipment. Net sales break down by family of products as follows:
- air management products (54.6%): turbochargers, timing systems, emissions systems, thermal systems, smart remote actuators, powertrain sensors, canisters, cabin heaters, battery heaters and battery charging products;
- e-propulsion & drivetrain products (30.3%): rotating electrical components, power electronics, control modules, software, friction and mechanical products for automatic transmissions and torque management products;
- gasoline and diesel fuel injection components and systems (15.1%): pumps, injectors, fuel rail assemblies, and complete systems.
At the end of 2023, the group had 79 production and assembly sites worldwide.
Net sales are distributed geographically as follows: the United States (16.4%), Germany (11.8%), Poland (7.9%), Hungary (6.4%), Europe (9.8%), China (21.1%), Mexico (12.4%), South Korea (8.2%) and other (6%).