BorgWarner Inc. on Thursday cut its revenue and earnings
guidance for the year, citing weak commercial vehicle markets
around the world and a production slowdown in China.
The Auburn Hills, Mich.-based company, which sells
horsepower-boosting turbochargers, said it is now expecting sales
to fall 5.5% to 2.5% this year, down from its previous expectation
for sales to be down 4% to flat.
The company expects earnings of $2.95 to $3.10 a share, down
from its previous range of $3.10 to $3.30 a share.
Chief Executive James R. Verrier said the company continues to
see strong demand for its products aimed at boosting the efficiency
of a vehicle. But BorgWarner is being hit by an unfavorable mix of
light vehicle production in North America, slower light vehicle
production growth in China and weak commercial vehicle markets.
For its second quarter, ended June 30, BorgWarner reported a
profit of $148.1 million, or 65 cents a share, down from $190.2
million, or 83 cents a share, a year earlier.
Excluding restructuring charges and other items, earnings were
75 cents a share.
Revenue fell 7.5% to $2.03 billion, with currency impacts
reducing growth by 11%.
Analysts polled by Thomson Reuters had forecast 82 cents a share
in earnings on $2.08 billion in revenue.
Earlier this month, BorgWarner agreed to buy Remy International
Inc. for $950 million, a bet car makers want to wring more power
from the electric veins of their vehicles. The acquisition should
be completed in the fourth quarter.
Remy, of Pendleton, Ind., produces fuel-saving start-stop
technology. The technology shuts a car's engine off at a stop and
then re-engages it when the accelerator is pressed, which saves
gasoline while a car is idling.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
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