BORGWARNER REPORTS SECOND QUARTER U.S. GAAP EARNINGS OF $1.31 PER DILUTED SHARE

EXCLUDING NON-RECURRING ITEMS, THE COMPANY POSTS RECORD EARNINGS OF $1.12 PER DILUTED SHARE (UP 44%) RAISES 2011 FULL YEAR EARNINGS GUIDANCE TO $4.25 TO $4.45 PER DILUTED SHARE EXCLUDING NON-RECURRING ITEMS

Auburn Hills, Michigan, July 28, 2011 – BorgWarner Inc. (NYSE: BWA) today reported second quarter 2011 U.S. GAAP earnings of $1.31 per diluted share. Excluding non-recurring items, earnings were $1.12 per diluted share, a new record for the company, up 44% from $0.78 per diluted share in second quarter 2010. Sales were up 28% from second quarter 2010, while global vehicle production was down approximately 2%.

Second Quarter Highlights:

  • Record sales of $1,819 million, up 28% from second quarter 2010.
  • Record earnings of $1.12 per diluted share, excluding net gains of $0.14 per diluted share related to a patent infringement settlement payment from Honeywell and $0.05 per diluted share related to tax adjustments. Including these non-recurring items, and on a U.S. GAAP basis, earnings were $1.31 per diluted share.
  • Operating income of $199 million, or 11.0% of sales, excluding the $29 million pretax gain related to the Honeywell settlement.
  • Earnings guidance for 2011, excluding non-recurring items, raised to $4.25 to $4.45 per diluted share from $3.85 to $4.15 per diluted share.

Second Quarter Performance: “Our business continued to strengthen in the second quarter,” said Timothy Manganello, Chairman and CEO of BorgWarner. “Increased global demand for our advanced powertrain technology, focused on improving fuel economy, performance and emissions reduction, continued to drive growth for our company far in excess of industry growth. Excluding the impact of currency and sales related to the acquisition of Haldex Traction Systems, which closed in first quarter 2011, our sales were up approximately 15% in the second quarter, compared with a 2% decline in global vehicle production. While growing our sales in the quarter, we also successfully managed costs, commodity pressures and the impact of the Japanese earthquake. This resulted in a strong operating income margin of 11.0%, excluding a nonrecurring item.”

2011 Outlook: Today the company raised its 2011 earnings guidance range, excluding non-recurring items, to $4.25 to $4.45 per diluted share from $3.85 to $4.15 per diluted share. Revenue growth in 2011 is now expected to be 25% to 28% compared with 2010, up from the previous guidance range of 19% to 23%. “Our business continues to gain momentum,” Manganello said. “Our improved outlook is largely due to additional new business growth and good cost controls at our operations. We also raised our forecast for the U.S. Dollar to Euro exchange rate to $1.40 from $1.32 previously. Approximately 3% of our expected revenue growth, and approximately $0.12 per diluted share of our earnings growth, is related to foreign currency exchange rates." Please download the complete Press Release on the right side.   

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