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BorgWarner Q4 earnings surge on turbocharging craze
Auto supplier BorgWarner Inc. boosted fourth-quarter profits as the company benefited from its automaking customers striving to increase fuel efficiency.

Fourth-quarter net income was $127.5 million, or $1.00 per share, up from $116.9 million or 89 cents, a year earlier.

Sales in the quarter totaled $1.77 billion, up 16 percent from a year earlier, the company said in a statement today.

Excluding nonrecurring items, BorgWarner posted earnings of $1.19 per share, beating Wall Street analysts' forecast of $1.17 per share, according to Thomson Reuters.

J.P. Morgan analyst Himanshu Patel said BorgWarner's fourth-quarter earnings were boosted by its stronger-than-expected operating margins of 12 percent, which was up from an operating margin of 10.3 percent a year earlier.

The Detroit-area supplier said it expects a 2012 operating margin of 11.5 percent or better and sales to increase between 10 percent and 12 percent.

Turbocharged results

BorgWarner is one of the industry leaders in fuel-efficient powertrain components and technology including turbocharging and duel clutch transmissions. Turbocharging allows automakers to use smaller engines to provide the power and acceleration of larger engines.

The company has benefited from stricter fuel economy standards, which in the United States are to rise to 35 miles per gallon by 2016 and proposed to rise to nearly 55 mpg by 2025.

BorgWarner's full-year 2011 net income of $550.1 million, or $4.45 per share, was up from 2010 net income of $377.4 million, or $3.07 per share.

Full-year 2011 sales of $7.11 billion rose 26 percent from the previous year. The yearly sales figure was a company record.

In January, BorgWarner CEO Tim Manganello said 45 percent of the company's new business through 2014 will be from its European customers. Manganello called said Europe "continues to be the hotbed of fuel economy."

China will account for 22 percent of the new business in the next three years, Korea 10 percent and 20 percent in North and South America, but only 6 percent from the Detroit 3, Manganello said. Reuters

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