The results season has rolled on with more upbeat results from leading suppliers. BorgWarner reported strong second quarter 2004 results and raised its guidance for the year as a result.
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Timothy Manganello, chairman and CEO, said that growth had been driven by the engine and drivetrain businesses, where rising diesel volumes in Europe and growing numbers of crossover vehicles in North America, together with a growth in chain engine timing systems in Europe and Asia, had increased volumes.
Sales were up 16% to $893.2m in the three months to 30 June 2004. Net earnings rose by almost $US10 million to $54.7 million in the three-month period.
The company also announced new business awards including the first domestic North American contract for BorgWarner’s InterActive Torque Management System. Production will start in 2006.
Earnings per share guidance was raised from $3.6 to $3.7 per share, although the company has been hit by higher steel and other commodity prices and higher health care costs.
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By GlobalDataTRW also reported strong second quarter results with sales up 6% to $3.2bn in the quarter to 30 June 2004. Profitability improved with net earnings of $75m in the quarter, compared with a loss in the comparable period last year and TRW was able to reduce debt.
Growth was driven “mainly by demand for our innovative safety-related technologies,” said John Plant, president and CEO. The company raised its full year 2004 earnings guidance on the strength of its improved performance. However, results were helped by foreign currency translation effects.
Leading French supplier Valeo also reported an upbeat picture. Valeo’s sales were up 4.4% in the second quarter of 2004, and the company showed an operating margin in the first half of the year of 5.6%.
Overall in the first half of the year Valeo’s sales were up only 1.7% but the prospects for takeoff soon are good. The company reported further growth in order intake (1.4 times sales in the first half of the year), and margins slightly exceeded market expectations.
Recent launches such as the BMW 1 Series, Dacia Logan, Jeep Grand Cherokee, Mercedes-Benz A-Class and Renault Modus have had more than €400 of Valeo content per vehicle, raising the company’s average, and Valeo’s new product range is expanding the potential Valeo content on new vehicles.
The company is expected to see organic growth of 5% in 2005 as the benefits of recent and near future launches feed through.
SupplierBusiness.com
