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| BorgWarner Q1 profits take a hit from electrification R&D, inflation |
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Posted by: OEM - 05-05-2023, 05:42 AM - Forum: Other Automakers
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BorgWarner Q1 profits take a hit from electrification R&D, inflation
<p><strong><a href="https://www.autonews.com/topic/borgwarner" target="_blank">BorgWarner Inc</a></strong>. executives are expecting a boom in the electrification business but not before e-products put some strain on its profitability.</p>
<p>The supplier saw first-quarter sales of $4.2 billion, up 8 percent from a year ago, and net earnings of $230 million, about flat with last year, according to its earnings report Thursday.</p><p>While the company increased its sales and earnings projections for the full year, its first-quarter profit results came in just shy of Wall Street expectations, due to inflated costs, high R&D spending on electrification and sagging sales in China, which is also hurting other suppliers with high exposure to the Far East.</p>
<p>"We outperformed the market both in Europe and North America," CEO Frederic Lissalde said on a call with investment analysts. "As we expected going into the quarter, our margin performance was negatively impacted by our planned e-R&D investment, net inflationary costs and the impact of low production in China."</p>
<p>BorgWarner, known for its turbochargers, has been working the last few years to shed ties to the internal combustion engine and recast itself as a leading supplier of inverters, batteries and other EV components. To that end, the <a href="https://www.crainsdetroit.com/auto-suppliers/borgwarner-spins-2-units-doubling-down-evs" target="_blank">spin-off of its fuel systems and aftermarket segments</a> — to be renamed Phinia — is expected to be complete by the end of the third quarter.</p>
<p>The supplier expects EV-related sales in 2023 to double from last year with between $1.5 billion and $1.8 billion in revenue.</p>
<p>Its adjusted net earnings were $1.09 per diluted share, 2 cents off analysts' mark.</p>
<p><strong><a href="https://finance.yahoo.com/quote/BWA?p=BWA&.tsrc=fin-srch" target="_blank">BorgWarner shares (NYSE: BWA)</a></strong> slipped 7.9 percent to close at $42.80 on Thursday.</p>
<p>The company generated $278 million of capital expenditures for the quarter, compared with $177 million the year prior, according to its 8-K quarterly report to the Securities and Exchange Commission.</p>
<p>In addition to R&D expenditure and the sluggish performance of one of its primary markets, increased costs dragged down the bottom line. BorgWarner reported about $28 million of inflationary costs in the first quarter and said it expects a $65 million costs headwind for the full year.</p>
<p>On its path to generate $4 billion of EV sales by 2025, BorgWarner has made significant capital expenses related to its EV business in the past few months. In April, it announced a $42 million expansion of its Seneca, S.C., battery plant., and a month before that, the company said it would <a href="https://www.crainsdetroit.com/auto-suppliers/borgwarner-invest-206-million-create-186-jobs" target="_blank">invest $20.6 million and create 186 jobs</a> in metro Detroit.</p>
<p>BorgWarner, based in suburban Detroit, is projecting full-year sales of between $17.1 billion and $17.9 billion, slightly higher than its prior guidance and up from the $15.8 billion it made in 2022.</p>
https://www.autonews.com/earnings-report...-inflation
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| Cash-strapped Lordstown may tap the brakes on Endurance production |
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Posted by: OEM - 05-05-2023, 05:42 AM - Forum: Other Automakers
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Cash-strapped Lordstown may tap the brakes on Endurance production
<p>Lordstown Motors on Thursday reported a steep fall in its cash reserves and warned it might have to stop making its Endurance electric pickup truck in the near future unless it finds a partner.</p>
<p>The cash-strapped <a href="https://www.autonews.com/topic/lordstown-motors" target="_blank">EV maker</a> had earlier this week said it might be forced to file for bankruptcy, citing uncertainty over a $170 million investment deal with its major shareholder Foxconn.</p>
<p>Lordstown, named after the town in Ohio where it is based, said on Thursday it was in talks with the Apple supplier but was yet to reach a deal.</p>
<p>In May 2022, Lordstown Motors completed a deal to sell its Ohio factory for $230 million to <a href="https://www.autonews.com/mobility-report/foxconn-considers-wisconsin-or-mexico-maiden-ev-plant" target="_blank">Foxconn</a>, excluding assets such as the hub motor assembly and battery pack lines.</p>
<p>Foxconn will make Fisker Inc's <a href="https://www.autonews.com/topic/electric-vehicles" target="_blank">electric</a> compact car at the Ohio factory starting next year, the EV startup has said.</p><p>Lordstown Motors had cash and cash equivalents of $108.1 million as of March 31, down from $203.6 million a year earlier.</p>
<p>Shares were little changed, having hit a record low of 25 cents on Monday.</p>
<p>Lordstown Motors and its EV peers have been struggling as access to capital tightens from rising interest rates and mounting economic uncertainty.</p>
<p>The company had resumed production of Endurance in March after a pause in February to address quality issues.</p>
<p>It said in February that it had made only 37 trucks for sale and recalled 19 vehicles delivered to customers or being used internally.</p>
<p>Net loss ballooned to $171.1 million in the quarter ended March 31, the company said on Thursday, from $89.6 million a year earlier.</p>
<p>Lordstown Motors had previously warned of substantial doubt about its ability to continue as a going concern, citing liquidity issues.</p>
https://www.autonews.com/manufacturing/l...production
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