According to Reuters, on October 31, auto parts supplier BorgWarner revised down its full-year 2024 sales forecast, citing a decrease in automotive production due to weakened consumer demand impacting the automotive sector.
For the third quarter of 2024, BorgWarner reported net sales of $3.449 billion, a year-over-year decline of approximately 5%. Operating income was $270 million, slightly down from $272 million in the same period last year. Net income reached $242 million, translating to diluted earnings per share (EPS) of $1.08, compared to net income of $87 million and EPS of $0.37 in Q3 2023. Adjusted diluted EPS was $1.09, exceeding the Q3 2023 figure of $0.98 and outperforming analysts' average estimate of $0.92, according to data from LSEG.
For the full year 2024, BorgWarner now expects net sales in the range of $14.0 billion to $14.2 billion, down from the previous forecast of $14.1 billion to $14.4 billion.
In recent years, automakers have worked to increase production of vehicles equipped with more efficient hybrid systems or turbochargers. BorgWarner, like other auto parts suppliers, has benefited from this trend. However, inflation, declining consumer demand, and strong competition from more affordable electric vehicles produced by Chinese companies have slowed down the pace for Western automakers.
Earlier this month, automotive consultancy firms J.D. Power and GlobalData lowered their global light vehicle sales forecast for 2024 by 500,000 units to 88 million units. This month, BorgWarner client Ford released a weak outlook, while another major client, Volkswagen, reported its lowest profits in three years and called for a 10% wage cut for employees. Together, these two automakers represented approximately 25% of BorgWarner's sales in 2023.
