DETROIT — BorgWarner Inc. posted moderate results in the fourth quarter and touted future restructuring efforts and its acquisition of Delphi Technologies as growth points for the first quarter.
BorgWarner reported on Thursday that fourth-quarter net income fell 4.34 percent to $220 million.
Net sales fell less than 1 percent to $2.6 billion in the fourth quarter, while adjusted operating income rose 5.3 percent to $340 million.
BorgWarner said light-vehicle outgrowth offset commercial-vehicle headwinds, and that its European business benefitted from stronger-than-expected diesel demand.
The powertrain and drivetrain supplier was also not impacted by the 40-day UAW strike at General Motors in the third or fourth quarters, which took a toll on the net profits of many other Tier 1 suppliers such as Aptiv and Lear Corp.
The supplier’s engine segment sales were down less than 1 percent to $1.5 billion in the fourth quarter.
Drivetrain segment net sales also decreased less than 1 percent to just over $1 billion.
The impact of the divestiture of BorgWarner’s thermostat product line decreased net sales by $31 million in the fourth quarter of 2019 compared with same period the year before.
2019 results
For the full year, BorgWarner net income dropped 20 percent to $746 million while net sales slipped 3.4 percent to $10.2 billion.
Adjusted operating income for the full year shrank 4.9 percent to $1.23 billion.
BorgWarner continues to restructure and consolidate manufacturing and technical centers in all major regions, the company said Thursday.
BorgWarner said it expects its primarily cash restructuring costs to be in the $275 million to $300 million range through the end of 2023, for an annual cost savings of approximately $90 million to $100 million by 2023.
Its recent acquisition of Delphi Technologies is also expected to strengthen the supplier’s propulsion systems.
Coronavirus risks
Regarding coronavirus, CFO Kevin Nowlan said in a call with investors that the company typically sees $1.8 billion in revenue from China production annually.
Nowlan said the longer there is production disruption in China as a result of the virus, the more likely BorgWarner could see disruptions in markets across the globe.
“Our guidance effectively reflects the production disruptions we’ve seen to date,” Nowlan said. “If production disruptions continue through the backend of February and into March, there could be additional pressure on our China revenue.”
Shares of BorgWarner gained 1.1 percent to close at $35.08 on Thursday.
BorgWarner, of Auburn Hills, Mich., 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.