BorgWarner Inc.'s second-quarter net income fell 37 percent from a year earlier to $172 million as revenue fell 5 percent to $2.55 billion.
The turbocharger and transmission-clutch supplier said the impact of foreign currencies decreased net sales by approximately $106 million. The decline in net earnings was blamed on softer sales, increased tariffs and inadequate supplier cost reductions.
The company said its second-quarter adjusted operating margin declined to 11.9 percent vs. 12.7 percent in 2018. Adjusted earnings of $255 million were down 23 percent from $314 million in 2018.
BorgWarner shares closed Thursday down 4.5 percent to $40.57.
Business generated by the company's engine segment fell 6 percent to $1.57 billion in the second quarter.
BorgWarner said excluding the impact of foreign currencies and the divestiture of the thermostat product line, engine segment sales for the second quarter were down 0.4 percent from a year earlier and adjusted EBIT -- earnings before interest, income taxes and non-controlling interest -- declined 7 percent to $258 million.
Revenue for the drivetrain unit decreased 4 percent to $998 million in the second quarter from $1.03 billion in 2018.
BorgWarner also said it's continuing to build its electrification portfolio and systems expertise by agreeing to form a joint venture with Romeo Power Technology, a technology-leading battery module and pack supplier. BorgWarner says it will own 60 percent interest in the new joint venture and total initial investment is expected to be $56 million.
Full-year revenue guidance is expected to be in the range of $9.94 billion to $10.18 billion, which is in the bottom half of the supplier's previous revenue range.
"To be clear, we are not satisfied with our margin performance in the full year of 2019. Our margin performance has historically been one of our strengths, and we are focused on maintaining that discipline," BorgWarner CEO Frederic Lissalde said. "In order to meet our long-term margins and cash-generation objectives, we are taking more aggressive steps to adapt our cost structure to the challenges facing our business. This will include more steps to manage our near-term cut and more aggressive restructuring measures than the ones we have previously announced."
BorgWarner ranks No. 22 on Automotive News' list of the top 100 global automotive parts suppliers, with $10.5 billion in sales to automakers in 2018. The company's largest customers are Ford Motor Co. at 14 percent of 2018 net sales and Volkswagen Group at 12 percent, according to its most recent annual report. No other single customer accounted for more than 10 percent of annual net sales.