BorgWarner has reported second quarter results.
Net sales were $3,758 million for the second quarter 2021, up 164% from $1,426 million for the second quarter 2020, due to the recovery of global markets from the negative effects of COVID-19 on 2020 production, the acquisition of Delphi Technologies and increased demand for the company’s products. Net earnings for the second quarter 2021 were $247 million, or $1.03 per diluted share, compared with a net loss of $(98) million, or $(0.47) per diluted share, for the second quarter 2020.
For the first six months of 2021, net sales were $7,767 million, up 110% from $3,705 million for the first six months of 2020, due to the recovery of global markets from the negative effects of COVID-19 on 2020 production, the acquisition of Delphi Technologies and increased demand for the company’s products. Net earnings for the first six months of 2021 were $312 million, or $1.30 per diluted share, compared with $31 million, or $0.15 per diluted share, for the first six months of 2020.
Net cash provided by operating activities was $622 million for the first six months of 2021, compared with $327 million for the first six months of 2020. Net cash used in investing activities increased to $1,099 million during the first six months of 2021 from $147 million during the first six months of 2020. This increase in cash used in investing activities was primarily due to cash outflows related to the 2021 acquisition of AKASOL and higher capital expenditures. Compared with the end of 2020, balance sheet debt at the end of the second quarter 2021 increased $574 million, while cash and cash equivalents decreased by $97 million.
Full Year 2021 Guidance
For the full-year 2021, net sales are expected to be in the range of $15.2 billion to $15.6 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 14% to 17%. The company expects its weighted light and commercial vehicle markets to increase in the range of approximately 8.5% to 11.0% in 2021. The acquisition of AKASOL AG is expected to increase year-over-year sales by approximately $75 million. Foreign currencies are expected to result in a year-over-year increase in sales of approximately $520 million primarily due to the strengthening of the Euro, Chinese Renminbi and Korean Won against the U.S. dollar.
Operating margin for the full year is expected to be in the range of 8.7% to 9.3%. Excluding the impact of non-comparable items, adjusted operating margin is expected to be in the range of 10.2% to 10.5%. Net earnings for the full year are expected to be within a range of $2.80 to $3.21 per diluted share. Excluding the impact of non-comparable items, adjusted net earnings are expected to be within a range of $4.15 to $4.40 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.
