BorgWarner Sees No Third-quarter Financial Impact From GM Strike

- Nov 04, 2019-

AUBURN HILLS—While several auto suppliers took a direct financial hit from the United Auto Workers' strike at General Motors, BorgWarner Inc. posted slightly higher third-quarter revenue, driven by new programs and a strong product mix in Europe and China.

Third-quarter net income fell 5.2 percent to $194 million from $204 million in the same period last year, the company said. Revenue was $2.49 million, up less than 1 percent from $2.48 million in the same period last year.

The supplier said it also secured deals from auto makers for two new electric products in 2021 and 2022.

"As we manage the challenging global market environment, we continue to pursue new business and new technologies," BorgWarner CEO Frederic Lissalde said in a call with investors Thursday. "This quarter, we achieved continued success on both fronts."

The powertrain and drivetrain supplier said third-quarter profit margins improved ahead of its full-year guidance.

"Earnings were better than our guidance driven by top-line performance and our cost-saving measures," Lissalde said.

Still, BorgWarner trimmed its 2019 sales outlook to $9.95 billion to $10.1 billion from a previous range of $9.94 billion to $10.2 billion, citing lower light-vehicle output and sales.

The supplier's engine segment sales were flat compared with the same period last year. Drivetrain segment net sales increased nearly 2 percent to $993 million from $976 million in the third quarter last year.

The impact of the divestiture of the company's thermostat product line also cut net sales by $29 million in the third quarter, BorgWarner said.

Shares of BorgWarner closed Thursday's trading up 6.3 percent to $41.68.

The GM strike impacted several major suppliers in the third quarter, including Tenneco, Aptiv, Lear Corp., Nemak, Adient and Faurecia.

Aburn Hills-based BorgWarner, ranked No. 22 on the Automotive News list of the top 100 global suppliers, with worldwide sales to automakers of $10.5 billion in 2018.