BorgWarner Inc. reported a Q1 net loss of USD7m on revenues down a staggering 45.3% year-on-year to USD819.5m.

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The small first quarter loss compares with a net profit of USD88.7m in the same quarter of last year.


The company drew attention to positive cash flow generation and the benefits from structural cost adjustments.


“BorgWarner distinguished itself from many industry peers by continuing to generate positive cash flow from operations in the first quarter,’ said Timothy Manganello, Chairman and CEO.


“Our cash on hand and cash generated in the quarter allowed us to repay $136.7 million of public debt that matured in February. In addition we have strengthened our financial structure by executing a very successful convertible bond offering and addressing our revolving credit facility.”

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“Further, the restructuring actions we took in 2008, while difficult, have already begun to yield positive financial results,’ he continued. “We also continued to make structural cost adjustments during the first quarter to improve operating efficiency, and to address profitability and cash flow.”


However, Manganello warned of uncertainties ahead.


“Customer schedules remain uncertain, providing little clarity to the rest of the year. As a result, we are sizing our operations as if first quarter production levels will continue throughout the remainder of the year. However, our target in this more challenging scenario, is to still generate positive earnings and cash flow from operations.


“The actions we have taken favourably position BorgWarner to withstand current industry pressures and resume growth as the auto sector recovers. The global focus on fuel efficiency and emissions reduction remains strong, and our technology and expertise meet that demand. We continue to execute against our long-term strategy and continue to invest in research and development that will foster future growth.’