CHICAGO -- Auto parts maker BorgWarner Inc. said on Friday it expects to take a net $29 million second-quarter, after-tax charge to settle claims of alleged contamination at a plant it acquired.
The settlement covers about 90 percent of the claims of alleged contamination at a Kuhlman Electric Corp. site in Mississippi, which occurred before BorgWarner bought its parent company, BorgWarner said.
Under the settlement, BorgWarner and other defendants agreed to pay up to $39 million in three equal installments by Jan. 2. BorgWarner will seek to recover its payments from insurers and others, which would be reflected later, it said.
The charge amounts to about 50 cents per share for Auburn Hills, Michigan-based BorgWarner, which produces turbochargers, timing devices, emissions technology and other products.
As a result, BorgWarner lowered its expected 2005 earnings per share range to $4.15 to $4.31, compared with previous forecasts for $4.65 to $4.81 per share.
BorgWarner also backed its 2005 earnings per share range of $4.27 to $4.43, excluding items. Analysts, on average, expect BorgWarner to earn $4.40 per share in 2005, according to Reuters Estimates.