CHICAGO -- Auto parts supplier BorgWarner Inc. said on Tuesday that quarterly earnings rose as it boosted sales and improved margins.
The company, which makes products for engines, transmissions and four-wheel-drives, reiterated that it expects higher 2003 earnings as it increases penetration of the industry's fastest growing segments.
BorgWarner said its forecast does not assume that economic conditions will change much.
"We don't foresee any major decline in business conditions," CEO John Fielder said on a conference call with analysts. "On the other hand, we don't anticipate any major upturn."
The Chicago company reported net income of $40.8 million, or $1.52 a share, compared with $2.2 million, or 8 cents a year ago.
Without a year-ago charge for nonrecurring items, BorgWarner would have earned $27.9 million, or 41.06 a share.
Revenue rose 20 percent to $701 million from $583 million. At its engine group, sales rose 17 percent on gains in its engine-chain timing systems and turbochargers.
In its driveline unit, sales increased 25 percent on higher volumes for Hyundai and Kia, and its InterActive Torque Management system application in the Acura MDS and the new Honda Pilot.
BorgWarner stuck to its January forecast that it will earn $6.20 to $6.35 in 2003. It would have earned $149.9 million, or $5.58 a share, in 2002 before one-time items.
Fiedler told analysts Tuesday that the estimate does not include any disruptions that might result from a possible war with Iraq.
"Strong demand is expected in Europe for our more fuel-efficient engine and transmission systems, and in North America for computer-controlled four-wheel and all-wheel drive systems that enhance vehicle stability," he said in a statement.
The company said it paid $15 million to Honeywell International Inc. during the second half of 2002 as royalties. It expects to pay $10 million in 2003, with the introduction of a product planned in July.
A German court ruled last month that BorgWarner infringed on a turbocharger patent held by Honeywell. BorgWarner reaffirmed Tuesday that it plans to appeal that decision.