BorgWarner Falls to Lowest Since 2012 as Dollar Pinches Outlook

  • Auto-parts supplier's 2016 profit forecast trails estimates
  • Currencies seen reducing profit by as much as 7 cents a share

BorgWarner Inc. dropped to a three-year low after the auto-parts maker forecast 2016 earnings that trailed analysts’ estimates, citing the strong dollar.

The shares fell 11 percent to $33.35 at 2:24 p.m. in New York after reaching $32.99, the lowest intraday price since November 2012.

BorgWarner said it expects earnings per share this year of $3.11 to $3.32. The average of estimates compiled by Bloomberg was for $3.39. The company, which gets about three-quarters of its revenue outside the U.S., said in a statement that foreign currencies would trim profit by as much as 7 cents a share. BorgWarner forecast annual sales of as much as $9.28 billion, missing the analyst average projection of $9.42 billion.

“If our current assumptions are correct for 2016, the impact of currency should be really severe in the first quarter and we shouldn’t see much of it going throughout the rest of the year,” Chief Financial Officer Ron Hundzinski said at a Deutsche Bank auto industry conference Wednesday in Detroit.

BorgWarner, which got 17 percent of its 2014 sales from Volkswagen AG, had already seen its stock price slide amid the automaker’s diesel-emissions scandal. Volkswagen stopped deliveries of diesel-powered vehicles after the U.S. Environmental Protection Agency revealed in September that the automaker admitted to installing illegal devices meant to defeat emissions tests. From Sept. 18, when the scandal broke, through Tuesday, BorgWarner fell 13 percent.

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