BorgWarner reported net sales of $1,426 million for the three months ended June 30, 2020, down 44 percent from $2,551 million for the second quarter 2019.
The company says the decrease was primarily because of production disruptions arising from the COVID-19 pandemic, including production slowdowns and shutdowns. Net loss for the second quarter 2020 was $98 million, compared with net income of $172 million for the second quarter 2019.
For the first six months of 2020, net sales were $3,705 million, down 28 percent from $5,117 million in the first six months of 2019 due primarily to production disruptions arising from the COVID-19 pandemic. Net income in the first six months of 2020 was $31 million, compared with $332 million for the first six months of 2019.
The decline in net earnings was primarily due to the impact of lower revenue. The impact of foreign currencies decreased net sales by approximately $88 million for the first six months of 2020 compared with the first six months of 2019.
Net cash provided by operating activities was $327 million for the first six months of 2020 compared with $467 million for the six months of 2019. Investments in capital expenditures, including tooling outlays, totaled $171 million for the first six months of 2020 compared with $244 million for the six months of 2019. Compared with the end of 2019, balance sheet debt at the end of the second quarter 2020 increased $1,099 million, while cash and cash equivalents increased by $1,171 million, in each case primarily as a result of the issuance of $1.1 billion in 2.650 percent senior notes due July 2027, the company says.
Engine segment net sales were $826 million in the second quarter 2020 compared with $1,569 million in the second quarter 2019. Excluding the impact of foreign currencies, net sales were down 46 percent from the prior year.
Drivetrain segment net sales were $607 million in the second quarter 2020 compared with $998 million in the second quarter 2019. Excluding the impact of foreign currencies, net sales were down 38 percent from the prior year.
BorgWarner is providing updated 2020 full year guidance. This guidance is for BorgWarner as currently consolidated and excludes the potential impact from the acquisition of Delphi Technologies PLC, which BorgWarner announced on January 28, 2020.
Net sales are expected to be in the range of $8.0 billion to $8.4 billion, under the assumption there are no additional production disruptions arising from COVID-19. This implies a year-over-year decrease in organic sales of 16 to 20 percent. The company expects its blended light-vehicle market to decline in the range of approximately 22 to 25 percent in 2020. Due to the impact of COVID-19, global light vehicle production expectations remain volatile, the company says.
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