BorgWarner Inc. reported first quarter results.
Net sales were $4,009 million for the first quarter 2021, up 76% from $2,279 million for the first quarter 2020, due to the acquisition of Delphi Technologies, increased demand for the Company’s products and the recovery of global markets from the negative effects of COVID-19 on 2020 production. Net earnings for the first quarter 2021 were $65 million, or $0.27 per diluted share, compared with net earnings of $129 million, or $0.63 per diluted share, for the first quarter 2020. Adjusted net earnings per diluted share for the first quarter 2021 were $1.21, up from adjusted net earnings per diluted share of $0.77 for the first quarter 2020.
Adjusted net earnings for the first quarter 2021 excluded net non-comparable items of $(0.94) per diluted share. Adjusted net earnings for the first quarter 2020 excluded net non-comparable items of $(0.14) per diluted share. The increase in adjusted net earnings was primarily due to the impact of higher sales and earnings from the acquisition of Delphi Technologies. The impact of foreign currencies increased net sales by approximately $194 million and increased adjusted operating income by approximately $25 million for first quarter 2021, compared with the first quarter 2020.
Net cash provided by operating activities was $342 million for the first three months of 2021, compared with $263 million for the first three months of 2020. Investments in capital expenditures, including tooling outlays, totaled $195 million for the first three months of 2021, compared with $117 million for the first three months of 2020. Compared with the end of 2020, balance sheet debt at the end of the first quarter 2021 decreased $28 million, while cash and cash equivalents increased by $105 million.
Air Management Segment Results: The Air Management segment net sales were $2,011 million during the first quarter 2021, compared with $1,434 million during the first quarter 2020. Excluding the impact of foreign currencies but including the estimated growth in Delphi Technologies-related revenue over pro forma 2020 Delphi Technologies revenue, organic sales were up 14% from the prior year. Adjusted earnings before interest, income taxes and non-controlling interest (“Adj. EBIT”) were $322 million, or 16.0% of sales, during the first quarter 2021, compared to $208 million, or 14.5% of sales, in the prior year. The increase in Adj. EBIT was primarily due to the impact of higher sales and the acquisition of Delphi Technologies.
e-Propulsion & Drivetrain Segment Results: e-Propulsion & Drivetrain segment net sales were $1,466 million during the first quarter 2021, compared with $860 million during the first quarter 2020. Excluding the impact of foreign currencies but including the estimated growth in Delphi Technologies-related revenue over pro forma 2020 Delphi Technologies revenue, organic sales were up 36% from the prior year. Adj. EBIT was $137 million, or 9.3% of sales, during the first quarter 2021, compared to $63 million, or 7.3% of sales, in the prior year. The increase in Adj. EBIT was primarily due to the impact of higher sales and the acquisition of Delphi Technologies.
Fuel Injection Segment Results: The Fuel Injection segment’s net sales and Adj. EBIT in the first quarter 2021 were $475 million and $33 million, respectively. Excluding the impact of foreign currencies but including the estimated growth in Delphi Technologies-related revenue over pro forma 2020 Delphi Technologies revenue, organic sales were up 9%. The Adj. EBIT margin was 6.9% in the first quarter 2021. This is a new segment following the Delphi Technologies acquisition.
Aftermarket Segment Results: The Aftermarket segment’s net sales and Adj. EBIT in the first quarter 2021 were $197 million and $21 million, respectively. Excluding the impact of foreign currencies but including the estimated growth in Delphi Technologies-related revenue over pro forma 2020 Delphi Technologies revenue, organic sales were up 11%. The Adj. EBIT margin was 10.7% in the first quarter 2021. This is a new segment following the Delphi Technologies acquisition.
Full Year 2021 Guidance: For the full-year 2021, net sales are expected to be in the range of $14.8 billion to $15.4 billion, under the assumption that there are no additional production disruptions arising from COVID-19. This implies a year-over-year increase in organic sales of 12% to 17%. The Company expects its weighted light and commercial vehicle markets to increase in the range of approximately 9% to 12% in 2021. Foreign currencies are expected to result in a year-over-year increase in sales of approximately $400 million primarily due to the strengthening of the Euro and Chinese renminbi against the U.S. dollar.
Operating margin is expected to be in the range of 8.7% to 9.4%. Excluding the impact of non-comparable items, adjusted operating margin is expected to be in the range of 10.1% to 10.5%. Net earnings are expected to be within a range of $3.42 to $3.92 per diluted share. Excluding the impact of non-comparable items, adjusted net earnings are expected to be within a range of $4.00 to $4.35 per diluted share. Full-year operating cash flow is expected to be in the range of $1,525 million to $1,675 million, while free cash flow is expected to be in the range of $800 million to $900 million.
