BorgWarner has reported that quarterly profit rose 22 percent in the second quarter. The company cited demand for the company’s technology for fuel-efficient engines in Europe and better than expected sales in North America as factors behind earnings growth.

For the 2004 second quarter, the company reported net earnings of $54.7 million or $0.97 per share, compared with $44.8 million or $0.83 per share, on a split-adjusted basis. Sales were $893.2 million compared with $769.5 million in the prior year’s second quarter.

Net earnings for the first six months of 2004 were $105.8 million, or $1.88 per share, compared with $89.0 million or $1.65 per share on a split-adjusted basis. Sales were up 16% to $1.8 billion, compared with $1.5 billion in 2003.

“We had a strong second quarter, delivering solid growth in both our Engine and Drivetrain businesses,” said Timothy M. Manganello, Chairman and CEO.

“The trends driving our growth are expected to continue into the second half of the year. These trends include the growth of diesel engines in Europe, the popularity of cross-over vehicles in North America and the move to chain engine timing systems in both Europe and Asia. Combining this growth with our focus on continuous improvement, we expect to grow faster than the industry. As a result, we are raising our guidance for the year to $3.60 to $3.70 per share, up from $3.55 to $3.65 per share. This range represents continued strong earnings growth in the second half of the year. Our guidance is based on current industry production assumptions and an expectation that commodity prices remain at current levels.”

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Operating income was $81.4 million or 9.1% of sales in the 2004 second quarter, compared with $69.6 million or 9.0% of sales in the 2003 second quarter. Research and development spending was $30.8 million in the quarter, versus $28.9 million in the same period in 2003.

During the quarter, BorgWarner stockholders approved an increase in the number of shares of authorized common stock to 150 million from 50 million allowing for a two-for-one stock split. The stock split was effective May 17, 2004. In addition, the company announced the first North American application of its intelligent torque management systems for a popular front-wheel-drive-based sport wagon, beginning in 2006. The company’s engine and transmission products will also help drive North America’s first hybrid, the Ford Escape, which is on sale now and will be arriving in dealerships later this summer.