) anticipates earnings growth of 23% to 27% to reach $5.35 to $5.6
5 per share in 2012 compared with 2011 earnings guidance of $4.35
to $4.45 per share, driven by a strong backlog of net new
The company predicted that the net new business, driven by
strong dem and for its product technologies (including gasoline and
diesel turbochargers, dual-clutch transmission, engine timing
systems and emissions products), w ill push sales to the tune of
10% to 12% in 2012 compared with 2011. Excluding the negative
impact of foreign currencies, sales growth is expected to be 14% to
16% during the year.
BorgWarner stated that global light vehicle production is
expected to grow by 6%, while European light vehicle production is
expected to fall 4% during the year.
The company expects operating margin to go up by 11.5% or better
in 2012 from 2011 levels. Th e improvement will be largely driven
by restructuring actions initiated in 2008 and 2009, incremental
income from higher sales, and cost reduction measures.
However, the positive effects will be partially offset by higher
raw material costs and other inflationary pressures. The company's
guidance was b ased on a U.S. Dollar to Euro exchange rate of $1.30
in 2012 compared with $1.40 in 2011. The company also expects
capital expenditures (including tooling outlays) of $450 million to
$500 million for the year to support its business growth.
In November last year, BorgWarner revealed that it expects net
new powertrain business of $2.5 billion from 2012 through 2014,
reflecting a 9% increase from its previous three-year net new
About 80% of the new business is expected to come from
engine-related products including turbochargers, ignition systems,
emissions products, engine timing systems, variable cam timing
modules and thermal systems.
The remaining 20% of the business is expected to emanate from
drivetrain-related products such as the company's fuel-efficient
DualTronic transmission technology, traditional automatic
transmission and all-wheel drive technologies.
The new business will involve programs with every major
automaker around the world. Europe - the market leader in
powertrain technology - is expected to account for 45% of the
Meanwhile, Asia is anticipated to account for 35%, with China
(22%) being the largest player as the top 25 customers of the
business will include 8 Chinese original equipment manufacturers
(OEMs). The remaining 20% of the business is expected to be
generated from the U.S. o ver three years.
BorgWarner, a Zacks#3 Rank (Hold) company, is a leading
manufacturer of powertrain products for the world's major
automakers. Its products include four-wheel-drive and
all-wheel-drive transfer cases (primarily for light trucks and
sport utility vehicles or SUVs), as well as automatic transmission
and timing chain systems.
These products are manufactured and sold worldwide, primarily to
original equipment manufacturers of passenger cars, SUVs, trucks
and commercial transportation products. The company's largest
The company posted a 64% increase in profit to $1.15 per share
in the third quarter of 2011 from 70 cents per share (excluding
non-recurring item) in the same quarter of 2010. The profit was
higher than the Zacks Consensus Estimate of $1.05 per share.
Net sales surged 27% to $1.79 billion from $1.41 billion in
2010-quarter led by st rong demand for the company's products in
the midstof an improving fuel econo my and emission
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