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UPDATE 2-BorgWarner bumps up outlook as earnings, margin climb

Wednesday, 30 Oct 2013 | 10:30 AM ET

* Third-quarter revenue rises 6.5 pct to $1.81 bln

* Earnings of $1.45/share beat expectations

* Raises 2013 profit forecast to $5.55-$5.65/share

DETROIT, Oct 30 (Reuters) - BorgWarner Inc, a maker of automotive engine and drivetrain components, raised its full-year earnings forecast after reporting a 65-percent jump in quarterly profit, due partly to higher demand for turbochargers and all-wheel-drive systems.

BorgWarner, which supplies components and systems to most of the world's leading automakers, said operating margin climbed to a record 12.5 percent in the third quarter compared with 11.3 percent a year ago and analysts' expectations of 11.5 percent.

Earnings for the quarter ended Sept. 30 were $166.8 million, or $1.45 per share, exceeding analysts' expectations. Revenues rose 6.5 percent to $1.8 billion, missing expectations.

The company raised its 2013 earnings forecast to a range of $5.55-$5.65 per share from $5.40-$5.55. Analysts on average were expecting $5.54 per share, according to Thomson Reuters I/B/E/S.

BorgWarner trimmed its outlook for full-year revenue growth to 3 percent to 4 percent, from 3 percent to 5 percent, but said it now expects its operating margin for the year to be 12 percent or better.

The company's engine group, which accounts for two-thirds of sales, reported a 3.6-percent gain in quarterly revenue to $1.2 billion, with operating margin rising to 16.2 percent.

The engine group supplies turbochargers, exhaust-gas recirculation coolers and variable-cam timing devices.

The drivetrain group, which sells all-wheel-drive systems and transmission components, reported a 13.1-percent rise in revenue to $604 million, with operating margin climbing to 10.9 percent.

BorgWarner shares were down slightly at $103.70 in early trading. The stock has risen 65 percent in the 12 months to Tuesday's close, outperforming the S&P 500 index.

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