BorgWarner Inc. has reported 2019 fourth quarter and full-year results.
Net sales were $2,559 million in the fourth quarter 2019, down 0.6% from $2,574 million in the fourth quarter 2018. Net income in the fourth quarter 2019 was $220 million, or $1.06 per diluted share, compared with $230 million, or $1.10 per diluted share, in the fourth quarter 2018.
Full year 2019 net sales were $10,168 million, down 3.4% from $10,530 million in 2018. Full year 2019 net income was $746 million, or $3.61 per diluted share, compared with $931 million, or $4.44 per diluted share, in 2018.
Engine segment net sales were $1,533 million in the fourth quarter 2019 compared with $1,541 million in fourth quarter 2018.
Drivetrain segment net sales were $1,042 million in the fourth quarter 2019 compared with $1,047 million in the fourth quarter 2018.
Full Year 2020 Guidance
The company has provided 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 Jan. 28, 2020. Net sales are expected to be in the range of $9,750 million to $10,075 million. This implies year-over-year organic sales change of down 2.5% to up 0.5%.
The company expects its blended light-vehicle market to decline in the range of 2% to 4% in 2020. Global light vehicle production expectations remain volatile, particularly in China. Foreign currencies are expected to result in a year-over-year decrease in sales of $130 million, primarily due to the depreciation of the Euro, Chinese Renminbi and Korean Won against the U.S. dollar.
The divestiture of the company’s thermostat product line will decrease year-over-year sales by approximately $30 million.
Net New Business Backlog
The company expects its 2020 to 2023 light vehicle net new business backlog to be within the range of $2,500 million to $2,630 million. Asia, the Americas and Europe are expected to account for approximately 70%, 20% and 10%, respectively, of the total net new business backlog over the four-year period with 50% expected in China. Electrification is driving greater than 100% of the net new business backlog amount over the four-year period.
Cost Restructuring Plan
Over the course of the next few years, the company plans to take additional actions to reduce existing structural costs. These actions are expected to result in primarily cash restructuring costs in the $275 million to $300 million range through the end of 2023. The resulting annual cost savings are expected to be in the range of approximately $90 million to $100 million by 2023. The company plans to utilize these savings to sustain the company’s strong operating margin profile and long-term cost competitiveness.