BorgWarner reports record fourth quarter earnings

AUBURN HILLS (AP) -- Auto parts maker BorgWarner Inc. reported last Thursday that its earnings for the fourth quarter more than doubled from the same period a year ago as global auto sales began to recover and automakers bought its turbochargers and other parts that help make cars and trucks more efficient.

The Auburn Hills company said its net income rose to $116.9 million, or 89 cents per share, in the quarter ending Dec. 31, up from $52.7 million, or 45 cents per share, in the last quarter of 2009.

Revenue was $1.53 billion, up 28 percent from the $1.2 billion a year ago.

The company beat Wall Street estimates. Analysts polled by FactSet expected earnings of 82 cents per share on revenue of $1.46 billion.

Shares of BorgWarner rose 65 cents to $72.59 in morning trading.

For the full year, the company reported net income of $397.8 million, or $3.07 per share, up from $27 million, or 23 cents per share, in 2009, when the global auto industry was in the worst sales slump in three decades. The industry began to recover in 2010.

Revenue rose to $5.65 billion in 2010 from $3.96 billion in 2009.

The company said that despite the strong 2010 performance, it does not think last year was a peak.

CEO Tim Manganello said in a statement that BorgWarner expects 16 to 20 percent revenue growth and 30 to 40 percent earnings growth in 2011 compared with 2010, with an operating income margin of 10.5 percent or better.

Analysts expect earnings of $4.03 a share on revenue of $6.68 billion in 2011.

BorgWarner said its sales growth last year was sharply higher than global vehicle production growth of approximately 4 percent.

"New business growth was the driving force behind our fourth quarter results as it had been throughout the year," Manganello said in the statement.

"Adoption rates of our leading-edge powertrain technology continued to outpace vehicle production growth in every major region of the world."

BorgWarner makes turbochargers, automatic transmission technology, engine timing systems and emissions reduction products that are used by automakers to improve gas mileage and air quality. Its products are in great demand because auto companies are under pressure to increase gas mileage to comply with increased fuel economy standards. In the U.S., the new-vehicle fleet average has to reach 35.5 mpg by 2016, an increase of more than 40 percent over current standards.

Published: Mon, Feb 14, 2011


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