BorgWarner Inc raised its full-year earnings and revenue forecast on Wednesday, and said the impact from the global semiconductor crunch would be lower in the second half of the year.
However, the auto parts maker does not expect third and fourth-quarter revenue to return to first-quarter levels, due to lower commercial vehicle production and ongoing supply constraints.
Shares of the company, which makes products including turbochargers and battery heaters, were down 2.6% at $48.04 in late morning.
Chief Financial Officer Kevin Nowlan on a post-earnings conference call said the chip shortage was reducing the company’s expectations for North American and European industry growth.
“We believe the impact of the semiconductor shortages will be lower in the second half of the year than what we saw last quarter,” Nowlan said.
BorgWarner, which posted a better-than-expected second-quarter profit and revenue, has seen rising demand for its products amid a recovery from the negative effects of the COVID-19 pandemic on 2020 production.
“Sentiment on BorgWarner has been muted given elevated concerns of disruption amid increased bullishness on electrification – investors see elevated risks of insourcing plus competition in a future EV world,” Credit Suisse analyst Dan Levy said in a note.
The company expects 2021 adjusted earnings per share between $4.15 and $4.40, assuming no further production disruptions due to the pandemic, compared to a previous forecast of $4.00 to $4.35.
Excluding items, BorgWarner earned $1.08 per share, above analysts’ estimates of 81 cents, according to Refinitiv data.
Revenue surged 163.5% to $3.76 billion, beating estimates of $3.48 billion.
The company also raised its full-year sales forecast to between $15.2 billion and $15.6 billion, up from a prior range of $14.8 billion to $15.4 billion.
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