BorgWarner has posted record second quarter sales of $US1,364.3m, up 17% from second quarter 2006 and said sales outside of the US grew 20% excluding currency effects.

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Earnings per share rose 7% to $1.29 and the 8.3% operating income margin “showed strong growth over last year”, driven by the demand for fuel-efficient engine and drivetrain technology around the world, the company said. It added it achieved solid earnings growth in the quarter despite the impact of lower domestic vehicle production and sharply higher commodity costs.


BW has raised its 2007 full year sales growth forecast to over 10% and its earnings guidance by $0.10 per share to at least $4.63 primarily due to the favourable impact of foreign currencies. Operating margins are expected to be near the low end of the historical range of 8.5% to 9.0%.


“BorgWarner had an outstanding quarter,” said chairman and CEO Tim Manganello. “Sales in the US were up 2%, despite US vehicle production down 3%.”


“The restructuring of our North American operations in the second half of 2006, actions we took in anticipation of permanent reductions in customer production schedules, has stabilised our margins.”

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Net income in the quarter was $75.7m, or $1.29 per share, compared with $70.2m, or $1.21 per share in second quarter 2006. The impact of foreign currencies, primarily the euro, increased sales by $51.3m, or 4%, and net income by $2.8m, or $0.05 per share.


Q2 operating income was $113.6m, or 8.3% of sales, versus $107.5m, or 9.2% in second quarter 2006.


Research and development spending was $56.7m in the quarter versus $47.8m in 2006.


First-half sales rose 14% to $2,642.1m and net income was $134.1m compared with $131.5m.