Engineered automotive systems supplier BorgWarner Inc. (BWA) reported Friday a profit for the second quarter, compared to a loss last year, helped by stronger demand that resulted in a 55.2% growth in revenue. Both adjusted earnings and revenue came in above Street view. Looking ahead to the full year, the company boosted its earnings outlook to a range above the current estimate of analysts.
For the second quarter, net income attributable to BorgWarner was $82.8 million, compared to a net loss of $35.9 million for the previous year. For the quarter, the company had to bear net interest expense on convertible debt of $5.1 million. Per-share earnings attributable to BorgWarner, after excluding the expense was $0.68, compared to loss per share of $0.31 last year.
The results of the latest quarter included a $28 million environmental litigation settlement, which was in part offset by an equity investment gain of $8 million. The prior-year results was hurt by restructuring expense of $50.3 million.
Excluding items, earnings for the period was $0.78 a share, compared to a loss of $0.05 a share last year. On average, 17 analysts polled by Thomson Reuters expected the company to report earnings of $0.67 per share in the second quarter. Analysts' estimate typically excludes special items.
The quarterly net sales for the Auburn Hills, Michigan-based firm grew 55.2% to $1.42 billion from $0.92 billion, helped by growing demand for its fuel-efficient technologies. Twelve analysts were expecting revenue of $1.32 billion in the second quarter.
Segment-wise, sales in Engine business went up 51.8% to $1.02 billion from $0.67billion in the prior-year quarter, reflecting strong turbocharger and timing system growth in the Asian markets coupled with robust turbocharger growth in Europe. On a constant currency basis, sales climbed about 55%, the company noted.
Drivetrain segment net sales surged 64.3% to $408.7 million from $248.8 million. Excluding the impact of currency, sales rose about 66% year-over-year.
Commenting on the results, Timothy Manganello, chief executive of BorgWarner, said that improvement in demand for the company's power-train products drove its second quarter results.
Manganello continued, "Our sales were up 55% in second quarter 2010 compared with second quarter 2009, while global vehicle production was up 29%. The primary driver of our out-performance was new business growth as our product technology continued to penetrate the global market. Favorable macroeconomic trends, such as the continued volume shift in Europe toward vehicles with higher BorgWarner content, including diesels, also boosted results."
Looking ahead, the company raised its full-year adjusted earnings outlook range to $2.60 per share to $2.80 per share from an earlier range of $2.20 per share to $2.50 per share. BorgWarner also said it sees revenue in 2010 to grow 32% to 35% from 2009. Manganello explained that the firm lifted its outlook, considering the ramp up of vehicle production in North America, Europe and China since it last provided guidance.
Analysts are currently looking for earnings of $2.42 per share on revenue of $5.13 billion for fiscal 2010.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.