BorgWarner (BWA) To Report Q2 Earnings: What's In Store?

BorgWarner Inc. (NYSE:BWA) is set to release its second-quarter 2017 results before the market opens on Jul 27.

Last quarter, the company delivered a positive earnings surprise of 8.33%. It has done the same in each of the trailing four quarters, with an average beat of 3.32%.

Let’s see how things have shaped up for the forthcoming announcement.

BorgWarner Inc. Price and EPS Surprise

BorgWarner Inc. Price and EPS Surprise | BorgWarner Inc. Quote

Factors at Play

BorgWarner expects second-quarter 2017 earnings per share to be in the range of 87-91 cents, higher than the 84 cents earned in the second-quarter 2016. Organic net sales growth for the quarter is projected in the 3–6.5% band.

A healthy balance sheet and ample cash flow will help BorgWarner return capital to its shareholders. These efforts are likely to positively impact its earnings per share. Also, the company is poised to benefit from its expansion strategy. The acquisition of Remy International is an effort to attain annual revenues of $15 billion by 2020. BorgWarner expects the buyout to enhance its position in the fast-growing powertrain electrification business.

However, foreign currencies are likely to leave a negative impact of $0.05 on its second-quarter 2017 earnings per share.

Earnings Whispers

Our proven model does not conclusively show that BorgWarner will beat estimates this quarter, as it does not have the right combination of two key ingredients.

Zacks ESP: BorgWarner has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 89 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: BorgWarner currently carries a Zacks Rank #3 (Hold). Note that stocks with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 have a significantly higher chance of an earnings beat. Conversely, the Sell-rated stocks (#4 or 5) should never be considered going into an earnings announcement.

Price Performance

BorgWarner stock has gained 10% in the last three months, outperforming the 8.1% increase of the industry it belongs to.

Stocks to Consider

Here are some other companies you may want to consider, as our model shows that these have the right combination of elements to come up with an earnings beat this quarter:

Cummins Inc. (NYSE:CMI) has an Earnings ESP of +3.1% and a Zacks Rank #2. The company is expected to report its second-quarter 2017 results on Aug 1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Tenneco Inc. (NYSE:TEN) has an Earnings ESP of +1.67% and a Zacks Rank #3. The company’s second-quarter 2017 financial results are expected to release on Jul 28.

Horizon Global Corporation (NYSE:HZN) has an Earnings ESP of +2.99% and a Zacks Rank #3. The company’s second-quarter 2017 financial results are expected to release on Aug 1.

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