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BorgWarner hits low target
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October 23, 2000: 3:55 p.m. ET
Third-quarter profit falls on weak euro, heavy truck slump; sees 2001 growth
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NEW YORK (CNNfn) - Automobile parts maker BorgWarner Inc. Monday reported a drop in third-quarter profit that met lowered Wall Street estimates, citing weak European currencies and two major automaker's production cutbacks.
But the company said it expects to score growth of 3 to 5 percent in the fiscal 2001.
Chicago-based BorgWarner (BWA: Research, Estimates), which makes highly engineered systems for cars, reported a third-quarter profit, before special items, of $24.9 million, or 95 cents a share, compared with $27.4 million, or $1.02 per share, in the year-ago quarter.
In September, the company, citing rising costs, lowered its outlook for the quarter, and instituted a program it hopes will save the company some $9 million annually. After that announcement, analysts trimmed their third- quarter estimates to 95 cents a share from about $1.06 before the warning.
Net income for the third quarter was $5.3 million, after a one-time restructuring charge of $19.6 million, or 75 cents a share. Sales in the period rose to $618.5 million, up 5 percent compared with $589.7 million in the prior third quarter.
The company said its results were bruised by, and will continue to be affected by, the effect of currency translation from the euro, weak volumes for Ford Motor Co. (F: Research, Estimates) and DaimlerChrysler (DCX: Research, Estimates) vehicles in which BorgWarner has significant content, and a deterioration in heavy-duty truck orders from all-time highs to below-average levels this year.
The company was affected by Ford's decision to temporarily halt production at three truck assembly plants in order to free up tires to be used as replacements in the Firestone recall.
 Looking ahead, BorgWarner said it expects to report full-year earnings above last year's level of $5.07 per share, excluding charges, and noted that growth from continuing operations in 2001 is expected to be about 3 percent to 5 percent.
Analysts surveyed by First Call had expected the company to report a full-year profit of $5.34 a share.
"We have acted quickly and continue to focus on getting costs in line to manage through this period of slower industry growth," Chairman and CEO John Fiedler.
"By managing our operations effectively over the next year, we will be well positioned to keep BorgWarner on track to achieve our historic growth targets," he added.
He cited as a key growth catalyst the auto industry's need to improve fuel economy and air quality worldwide.
In Monday afternoon trading, shares of BorgWarner rose $1.63 to $34.75. 
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HURT BY SALES SLUMP, EURO
