BorgWarner Inc. (BWA) has reported a 15.30 percent rise in profit for the quarter ended Mar. 31, 2017. The company has earned $189.20 million, or $0.89 a share in the quarter, compared with $164.10 million, or $0.75 a share for the same period last year. On an adjusted basis, earnings per share were at $0.91 for the quarter compared with $0.80 in the same period last year.
Revenue during the quarter grew 6.10 percent to $2,407 million from $2,268.60 million in the previous year period. Gross margin for the quarter expanded 103 basis points over the previous year period to 21.49 percent. Total expenses were 87.84 percent of quarterly revenues, down from 88.35 percent for the same period last year. This has led to an improvement of 51 basis points in operating margin to 12.16 percent.
Operating income for the quarter was $292.70 million, compared with $264.20 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $351.80 million compared with $323 million in the prior year period. At the same time, adjusted EBITDA margin improved 38 basis points in the quarter to 14.62 percent from 14.24 percent in the last year period.
For the second-quarter 2017, BorgWarner Inc. expects revenue to grow in the range of 3 percent to 6.50 percent. The company projects diluted earnings per share to be in the range of $0.87 to $0.91
For financial year 2017, BorgWarner Inc. expects revenue to be in the range of $8,810 million to $9,040 million. The company projects diluted earnings per share to be in the range of $3.50 to $3.60.
Operating cash flow improves significantly
BorgWarner Inc. has generated cash of $60.30 million from operating activities during the quarter, up 75.29 percent or $25.90 million, when compared with the last year period.
The company has spent $132.70 million cash to meet investing activities during the quarter as against cash outgo of $103.20 million in the last year period. It has incurred capital expenditure of $130.60 million on net basis during the quarter, up 26.55 percent or $27.40 million from year ago period.
The company has spent $15.80 million cash to carry out financing activities during the quarter as against cash outgo of $124.80 million in the last year period.
Cash and cash equivalents stood at $358.40 million as on Mar. 31, 2017, down 8.64 percent or $33.90 million from $392.30 million on Mar. 31, 2016.
Working capital increases
BorgWarner Inc. has recorded an increase in the working capital over the last year. It stood at $956.10 million as at Mar. 31, 2017, up 9.64 percent or $84.10 million from $872 million on Mar. 31, 2016. Current ratio was at 1.44 as on Mar. 31, 2017, up from 1.38 on Mar. 31, 2016.
Days sales outstanding went down to 67 days for the quarter compared with 71 days for the same period last year.
Days inventory outstanding has decreased to 16 days for the quarter compared with 37 days for the previous year period.
Debt comes down
BorgWarner Inc. has recorded a decline in total debt over the last one year. It stood at $2,295.40 million as on Mar. 31, 2017, down 11.66 percent or $303 million from $2,598.40 million on Mar. 31, 2016. Total debt was 25.27 percent of total assets as on Mar. 31, 2017, compared with 29.06 percent on Mar. 31, 2016. Debt to equity ratio was at 0.66 as on Mar. 31, 2017, down from 0.69 as on Mar. 31, 2016.
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