BorgWarner’s net earnings fell 5.5 percent to $204 million, but operating income surged 40 percent to $383 million from last year.
BorgWarner
Auburn Hills-based BorgWarner expects its EV business to generate about $4 billion by 2025.
Supplier BorgWarner Inc. saw strong second-quarter growth in revenue and a small dip in earnings amid the completion of its aftermarket spinoff.
The supplier said net earnings fell 5.5 percent to $204 million, but operating income surged 40 percent to $383 million from last year. Second-quarter revenue rose 20 percent to $4.52 billion, up from the stagnation of the same quarter last year because of conversion on sales and customer pricing, BorgWarner executives said. The suburban Detroit company supplies powertrains and turbochargers.
“We continue to expect to deliver strong organic growth to drive improved profitability in our e-products as we leverage our top-line growth and to continue to make the necessary investments to support the long-term profitable growth of our e-product portfolio,” BorgWarner CFO Kevin Nowlan said in a call with investors Wednesday.
The supplier’s net merger, acquisition and divestiture expenses spiked this quarter, up $47 million to $56 million. The company recently completed a spinoff of its fuel systems and aftermarket segments into a publicly traded company named Phinia, which focuses on gasoline and alternative fuels.
BorgWarner’s recent acquisitions include Santroll’s light-vehicle eMotor business, Rhombus Energy Solutions, Drivetek and SSE. In June, the supplier also announced an agreement to acquire a manufacturer of EV charging components from Italian electronics supplier Eldor for about $80 million.
The supplier said free cash flow fell 39 percent to $38 million because of an $88 million increase in capital expenditures and tooling outlays.
The company’s individual business units all saw growth in net sales over the quarter. Revenue for the air management system unit rose 17.6 percent to about $2 billion, while revenue for Drivetrain rose 24.8 percent to about $1.1 billion. E-Propulsion rose about 31 percent to $567 million.
BorgWarner also announced three new partnerships as part of its transition to electrification, including awards to supply integrated drive modules for a Chinese automaker, as well as an EV platform for an Asian automaker. BorgWarner CEO Fred Lissalde did not name the automakers.
Shares of BorgWarner slipped 7.5 percent to $42.99 in midday trading Wednesday.
BorgWarner ranks No. 18 on the Automotive News list of the top 100 global suppliers, with worldwide sales to automakers of $14.5 billion in 2022.
