Powertrain supplier BorgWarner Inc. (NYSE:BWA) reported lower second quarter sales and income Thursday (July 25). It reduced second-half expectations because of volatile conditions for passenger vehicles, especially in China.
The Auburn Hills, Michigan-based maker of hybrid, electric and conventional transmissions for passenger cars and trucks said sales of $2.55 billion were down 5.3 percent from $2.69 billion in the same quarter in 2018.
Net income in the second quarter of 2019 was $172 million, or $1.00 per diluted share. Year-ago income was $272 million or $1.18 per share.
A consensus of 10 analysts predicted earnings per diluted share of $1.00, according to investor site Seeking Alpha.com. BorgWarner exceeded consensus estimates in three of the last four quarters.
The company lowered full-year 2019 guidance. Net sales are expected to be in the range of $9.94 billion to $10.18 billion, a 2.5 percent decline to flat compared with 2018. BorgWarner expects its market to decline 3.5 percent to 5 percent in 2019.
Shares closed 4.5 percent lower on the news Thursday, down $1.91 at $40.57.
Expectations for global light vehicle production remain volatile, particularly in China. BorgWarner expects foreign currencies to negatively impact year-over-year sales by $270 million, primarily due to the depreciation of the Euro, Chinese Renminbi and Korean Won.
The impact of foreign currencies reduced second-quarter net sales by about $106 million, or $0.04 per diluted share compared with the second quarter of 2018. Lower revenue, the cost of recently enacted tariffs and supplier cost reductions out of synch with normal customer price deflation also contributed to the lower income, the company said in a statement.
For the first six months of 2019, net sales were $5.2 billion, down 6.6 percent from $5.5 billion in the first half of 2018. Net income in the first six months of 2019 was $332 million, or $1.60 per diluted share, compared with $497 million, or $2.36 per diluted share, in the first half of 2018.
The impact of foreign currencies decreased net sales by approximately $233 million and decreased net earnings by approximately $0.10 per diluted share in the first six months of 2019 compared with the first six months of 2018.
Brokerage Compliance Symposium
The day before F3. Every compliance issue you face - fraud exposure, carrier liability, FMCSA rules, cargo theft, insurance gaps - navigated by attorneys and operators defining best practices in a changing industry.
F3 Awards Dinner
The night before F3. FreightTech100 companies honored. FreightTech 25 and Shipper of Choice winners revealed live. Cocktail reception into dinner and live music - 300 industry leaders in one purpose-built room.
F3: Future of Freight Festival
Industry-defining keynotes, rapid-fire technology demos, and industry leaders networking in experiences across Chattanooga - plus the inaugural F3 Awards Dinner featuring the FreightTech and Shipper of Choice reveals.
The day before F3. Every compliance issue you face - fraud exposure, carrier liability, FMCSA rules, cargo theft, insurance gaps - navigated by attorneys and operators defining best practices in a changing industry.
The Signal at Chattanooga Choo Choo • Chattanooga, TN Register NowThe night before F3. FreightTech100 companies honored. FreightTech 25 and Shipper of Choice winners revealed live. Cocktail reception into dinner and live music - 300 industry leaders in one purpose-built room.
The Signal at Chattanooga Choo Choo • Chattanooga, TN Register NowIndustry-defining keynotes, rapid-fire technology demos, and industry leaders networking in experiences across Chattanooga - plus the inaugural F3 Awards Dinner featuring the FreightTech and Shipper of Choice reveals.
The Signal at Chattanooga Choo Choo • Chattanooga, TN Register Now