CHICAGO -- Auto parts maker BorgWarner Inc. on Thursday said quarterly profit rose 22 percent on demand for its engine technology in Europe and better than expected U.S. sales, and raised its full-year outlook.
At a time when North American vehicle production is expected to slow in the second half of the year due to softening consumer demand, BorgWarner said it expects to grow faster than the industry overall.
The maker of engine and drivetrain systems said second-quarter net income rose to $54.7 million, or 97 cents a share, from $44.8 million, or 83 cents a share, a year ago.
Analysts on average had expected earnings of 92 cents a share, with estimates ranging from 87 cents to 95 cents, according to Reuters Estimates.
Sales rose 16 percent to $893.2 million.
Engine group sales climbed 19 percent to $559.6 million from a year ago, driven by demand for fuel-efficient engines in Europe, a move from belt to chain timing systems among European and Asian automakers, and the strong commercial vehicle market.
Sales for the drivetrain group rose 12 percent to $347.4 million on the growth of four-wheel-drive systems in North America and strong demand for transmission systems worldwide.
However, operating income for the unit was flat due to higher prices for steel and other commodities and higher health care costs.
BorgWarner raised its full-year profit forecast to $3.60 to $3.70 a share, from a previous forecast of $3.55 to $3.65 a share.
Analysts on average had expected BorgWarner to earn $3.62 a share in 2004, according to Reuters Estimates.
BorgWarner is 29th on the Automotive News ranking of top suppliers to North American automakers in 2003 with $1.56 billion in total North American sales.