BorgWarner reported net sales were $2,534 million for the three months ended Sept. 30, 2020, up 2 percent from $2,492 million for the third quarter 2019, as increased demand for the company’s products offset lower industry production volume.
Net earnings for Q3 were $111 million, compared with net earnings of $194 million for the third quarter of last year.
Engine segment net sales were $1,476 million during the third quarter 2020, compared with $1,514 million during the third quarter 2019. Excluding the impact of foreign currencies, net sales were down 4 percent from the prior year. Adjusted earnings before interest, income taxes and non-controlling interest (“Adj. EBIT”) were $225 million during the third quarter 2020, compared with $241 million from the prior year. The decline in Adj. EBIT was primarily due to the impact of lower revenue. The impact of foreign currencies was not significant, the company says.
Drivetrain segment net sales were $1,075 million during the third quarter 2020, compared with $993 million during the third quarter 2019. Excluding the impact of foreign currencies, net sales were up 8 percent from the prior year. Adj. EBIT was $131 million during the third quarter 2020, compared with $100 million from the prior year. The increase in Adj. EBIT was primarily due to the impact of higher revenue. Excluding the impact of foreign currencies, Adj. EBIT was $133 million, up $33 million from the third quarter 2019.
For the fourth quarter 2020, BorgWarner says net sales are expected to be in the range of $3.46 billion to $3.61 billion, under the assumption that there are not additional production disruptions arising from COVID-19. This includes the impact of the acquisition of Delphi Technologies, which is expected to increase fourth quarter sales by $950 million to $1.0 billion. Excluding the impact of non-comparable items, adj. operating margin is expected to be in the range of 8.8 to 9.6 percent.
For the full-year 2020, net sales are expected to be in the range of $9.7 billion to $9.85 billion, under the assumption that there are not additional production disruptions arising from COVID-19. This implies a year-over-year decrease in organic sales of 12.5 to 13.5 percent. The company expects its blended light-vehicle market to decline in the range of approximately 18.5 to 19.0 percent in 2020. The divestiture of the thermostat product line decreased year-over-year sales by approximately $30 million. Foreign currencies are expected to result in a year-over-year decrease in sales of approximately $18 million.
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