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February 10, 2011

US: BorgWarner 2010 sales a record

BorgWarner said its 2010 sales were a record US$5.652bn, up 42.7% from 2009. Operating income was $504.3 million, or 8.9% of sales.

BorgWarner said its 2010 sales were a record US$5.652bn, up 42.7% from 2009. Operating income was $504.3 million, or 8.9% of sales.

Chairman and CEO Timothy Manganello said: “For the full year, we posted record sales and earnings, and our operating income margin was the highest it has been in several years. These are remarkable accomplishments considering they were achieved with depressed volumes and immediately following one of the most difficult periods in our history. However, we do not believe that 2010 was a peak year. In 2011, we expect 16% to 20% sales growth and 30% to 40% earnings growth compared with 2010, and an operating income margin of 10.5% or better.”

2010 net profit was $377.4m compared with $27m in 2009.

Significance: BorgWarner is one of the many US component suppliers which has emerged from the recent financial crisis in a strong financial state.  It is in a strong position to benefit from its focus on fuel-saving technologies, in both turbochargers and powertrain/transmissions parts in general.  Its earnings potential is enhanced because several of its new technologies are moving from optional fit items to standard fit items.  While this may result in lower unit prices as volumes rise, the solidity of revenue and profits is increased as fitment rates rise. 

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