BorgWarner cuts guidance as 2Q net profit falls

AUBURN HILLS, Mich. (AP) ? BorgWarner's second-quarter profit fell 26 percent, though the money-losing sale of its spark plug business masked what would have been a record quarter at the automotive parts supplier. Still, the company cited the slowing global economy as it sharply cut full-year forecasts for revenue and profit, sending shaes

The Auburn Hills, Mich., company earned $120.6 million from April through June, or $1 per share. That was down from $162 million, or $1.31 per share, a year earlier.

Excluding a 27-cent-per-share loss on the sale of a spark plug business to Federal Mogul Corp. and a 9-cent loss for tax adjustments, the company would have made a record $1.36 per share, it said. Revenue rose 2 percent to $1.86 billion for the quarter.

The earnings performance met Wall Street's expectations, though revenue fell shy of the consensus $1.95 billion.

BorgWarner said unfavorable foreign exchange rates lowered sales by 10 percent compared with the same quarter a year ago. U.S. companies are getting hammered by the value of the dollar because the euro has fallen so precipitously.

The company cut significantly its full-year revenue and net earnings forecasts, based on the weakening global economy, particularly in Europe. BorgWarner now expects net revenue to grow 4 percent to 6 percent, down from 10 percent to 12 percent. Net earnings are expected to fall between $5.05 and $5.25 per share, down from the previous forecast of $5.35 to $5.65. Analysts were expecting a forecast of $5.37 per share.

"Our outlook for Europe and for commercial vehicle markets around the world has been negatively impacted by the general slowdown in the global economy," Chairman and CEO Tim Manganello said. "Despite this, we expect to deliver industry-leading sales growth and record earnings this year."

Shares of BorgWarner Inc. rose 29 cents to $62.42 Thursday. The stock has changed hands between $54.59 and $87.45 in the past 52 weeks.

Source: http://news.yahoo.com/borgwarner-cuts-guidance-2q-net-profit-falls-144922138--finance.html

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