CHICAGO -- BorgWarner Inc. on Monday said it settled a patent dispute over turbocharger technology with Honeywell International Inc., agreeing to pay Honeywell a total of $29.1 million.
BorgWarner also confirmed its earnings guidance for 2003.
Shares of both companies slid following the announcement.
BorgWarner of Chicago said in a statement its turbo systems unit settled a dispute with New Jersey-based Honeywell over variable geometry turbochargers by extending a licensing arrangement through 2006. Payments related to the settlement will be made beginning in 2003 and ending in 2005.
BorgWarner forecast its 2003 earnings in the range of $6.20 to $6.35 per share.
Merrill Lynch analyst John Casesa said BorgWarner had factored the settlement into its earnings guidance for 2003 but costs from the deal could cause analysts to cut 2004 profit estimates for the company.
Casesa estimated BorgWarner's after-tax costs for the licensing payments at 30 cents a share in 2003, 35 cents in 2004 and 8 cents in 2005.