BorgWarner has posted record fourth quarter and full year results, saying they reflected strong performance around the globe, as strong sales growth in Europe and Asia, combined with structural improvements in North America, boosted results.
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Q4
Sales rose 14.2% to $1,372.9m in the fourth quarter while net income was $71.2m, or $0.60 per share, up from $40.9m, or $0.35 per share in Q4 2006.
The fourth quarter 2007 net income included unfavourable tax adjustments of $(13.3)m and purchase accounting adjustments related to the purchase of additional Beru shares of $(2.4)m.
Fourth quarter 2006 net income included restructuring charges, final purchase accounting adjustments of $(2.4)m related to the Q3 2006 acquisition of transmission and engine controls product lines from Eaton Corporation in Monaco; and $25.0m of favourable tax adjustments.
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By GlobalDataThe impact of foreign currencies in Q4 2007, primarily the euro, increased sales by $91m and net income by $6m.
FY2007
Full-year sales were $5,328.6m in 2007, up 16.2%. Net income was $288.5m, or $2.45 per share, compared with $211.6m in 2006.
Net income included net favourable tax adjustments, recorded in the third and fourth quarters, of $3.4m and purchase accounting adjustments related to the purchase of additional Beru shares of $(2.4)m.
2006 net income included charges related to restructuring activities in North America, reported in the third and fourth quarters, of $(47.6)m, final purchase accounting adjustments of $(2.4)m related to the third quarter 2006 Eaton acquisition, a gain related to a previous divestiture, reported in the third quarter, of $3.5m and $22.3m of favorable tax adjustments. The impact of foreign currencies, again primarily the euro, added $262m to sales in 2007 and $15m to net income.
“2007 was an excellent year for our company,” said chairman and CEO Tim Manganello. “Sales outside of the US grew 17%, excluding the impact of currency, compared with vehicle production outside of the US that was up 7%. Sales in our US operations were flat despite lower domestic vehicle production in the U.S., which was down 3%.”
“2007 was also a year during which events around the globe validated our company’s strategic plan. A number of governments, including the US, took steps toward increasingly stringent fuel economy standards, while the automotive industry continued to unveil powertrain strategies clearly focused on meeting tougher standards. BorgWarner… is well positioned to enjoy sustained growth as the industry accelerates its investment in advanced powertrains.”
Outlook
The company on Friday reiterated its expectations for 2008 full year earnings of $2.85 to $3.00 per share, saying it still expects to achieve sales growth of 8% to 10% in 2008 compared with 2007 and operating margins up from 2007 and within its historical range of 8.5% to 9.0%.
