Analyst Note| Richard Hilgert |
Narrow-moat rated BorgWarner reported third-quarter earnings per share before special items of $0.80, beating the $0.72 FactSet consensus estimate by $0.08 but $0.08 lower than the $0.88 reported last year. Consolidated revenue jumped almost 35% to $3.4 billion, compared with $2.5 billion reported in the COVID-19-pummeled year-ago period. Thanks to the chip crunch hit, organic revenue excluding the Delphi acquisition and currency effect declined 7%, outperforming a 22% plunge in global light vehicle production by 15 percentage points. We maintain our investment thesis that BorgWarner will increase revenue at above-market rates as automakers rely on its products that support reduced emissions and vehicle electrification.