Auto-parts maker BorgWarner Inc. (BWA) said weaker foreign
currencies and softer-than-expected volume hurt its sales growth
last year, but it remains hopeful the trend will reverse as the
dollar strengthens this year.
The comments sent shares down 3.6% to $49.59 in midday
trading.
The Auburn Hills, Mich.-based company affirmed its 2014 earnings
guidance, but said sales growth is now expected to be about 11.5%,
down from its earlier range of 12% to 13%.
For this year, the company expects earnings of $3.60 to $3.75 a
share on sales growth of 9.5% to 12%, excluding the impact of
foreign currency. Analysts had expected earnings of $3.70 a share
and 9% sales growth.
"We expect the strengthening dollar to have a meaningful impact
on our 2015 net sales," said Chief Executive James Verrier. About
three-quarters of BorgWarner's business is in foreign currencies,
including the euro, Chinese yuan, Japanese yen, Mexican peso and
Swedish krona. According to Mr. Verrier, all of these currencies
are expected to be weaker against the dollar this year.
BorgWarner earnings have grown quickly recently, as the company
was buoyed by the resurgence of U.S. auto demand. In its most
recently ended quarter, sales were up 13% from a year earlier.
However, shares have been down about 14% in the past 12 months
through Tuesday's close.
Write to Angela Chen at angela.chen@wsj.com
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