BorgWarner Q4 Earnings Surpass Expectations, Increase Y/Y

Core Viewpoint - BorgWarner reported strong adjusted earnings for Q4 2024, exceeding expectations, but net sales fell short of estimates, indicating mixed performance across segments [1][2]. Financial Performance - Adjusted earnings per share for Q4 2024 were $1.01, surpassing the Zacks Consensus Estimate of 92 cents and increasing from 90 cents in the prior year [1]. - Net sales for the quarter were $3.44 billion, missing the Zacks Consensus Estimate of $3.49 billion and reflecting a year-over-year decline of 2.36% [2]. Segmental Performance - Turbos & Thermal Technologies: Net sales were $1.41 billion, slightly down from $1.44 billion year-over-year, but beat estimates by 2.32%. Adjusted operating income rose to $223 million from $214 million, exceeding consensus by 12.98% [4]. - Drivetrain & Morse Systems: Net sales totaled $1.35 billion, down from $1.40 billion year-over-year, missing estimates by 1.09%. Adjusted operating income decreased to $240 million from $258 million, falling short of consensus by 3.58% [5]. - PowerDrive Systems: Sales were $525 million, down from $542 million a year ago, but beat estimates by 0.39%. The segment reported an adjusted operating loss of $14 million, an improvement from a loss of $16 million in the prior year [6]. - Battery & Charging Systems: Sales increased to $162 million from $151 million year-over-year, but missed estimates by 31.11%. The segment incurred an adjusted operating loss of $14 million, narrower than a loss of $40 million in the previous year [7]. Financial Position - As of December 31, 2024, BorgWarner had $2.09 billion in cash and equivalents, up from $1.53 billion a year earlier. Long-term debt increased to $3.76 billion from $3.71 billion [8]. - Net cash from operating activities was $682 million for the quarter, with capital expenditures at $161 million and free cash flow totaling $539 million [8]. 2025 Guidance - For full-year 2025, BorgWarner anticipates net sales between $13.4 billion and $14 billion, down from $14.1 billion in 2024. Adjusted operating margin is expected to be between 9.1% and 9.2%, with adjusted earnings projected at $4.05 to $4.40 per share [9]. - Operating cash flow is forecasted to be between $1.33 billion and $1.38 billion, while free cash flow is projected to be between $650 million and $750 million [9].