On July 24, Ford
Across the Atlantic, Daimler's
In short, now's not a particularly good time to have anything to do with the auto industry.
... you're BorgWarner
According to Borg, "strong demand for [its] fuel-efficient powertrain technologies in Europe and Asia ... more than offset declines in North America." Second-quarter sales grew 11%. Profits rose 16%. And even as the auto industry fell to shambles around it, Borg left its profit projections for the year basically intact. (Guidance now calls for 8% to 10% sales growth and $2.80 to $2.95 per share.)
Borg will assimilate you
A lot of companies say they look forward to recessions, because they're strong, their rivals are weak, and they expect to steal market share. But while talk is cheap, Borg's actions on this front are priceless. Within the U.S., industrywide car production declined 18% last quarter. Borg's sales were down only 17%. Abroad, car production was up 6% -- and Borg's sales rose 13%. So wherever you look, whether the market is contracting or expanding, Borg is grabbing market share.
Knocking and pinging
No company is perfect. There are a couple of knocks and pings audible in Borg's report that are worth listening for in future quarters. First, operating margins dipped about 30 basis points to 8%. Second, inventory is running a little hot -- up 17% year over year, on 11% sales growth.
Neither fact worries me seriously -- yet. But like the mechanic said: "You might want to get those looked at."
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