BorgWarner cuts 2023 revenue outlook due to weak yuan

(Reuters) – Auto parts supplier BorgWarner cut its full-year revenue forecast on Thursday as it expects to take a hit from foreign currency fluctuations, including a weakening Chinese yuan.

Parts makers have benefited from a strong order backlog in the past few quarters, as automakers race to produce more vehicles, helping them offset headwinds from a tight labor market and higher costs.

However, companies with substantial customers outside the United States are having to cope with the strengthening dollar lowering the value of overseas income.

BorgWarner trimmed its full-year net sales forecast to $14.1 billion to $14.3 billion, from $14.2 billion to $14.6 billion.

The company said its expects a roughly $110 million hit to the value of its sales as the yuan weakens against the dollar.

It also narrowed its 2023 adjusted profit forecast to $3.60 to $3.80 per share, from $3.50 to $3.85 per share.

However, the company’s adjusted profit of 98 cents per share for the third quarter beat analysts’ average expectations of 94 cents per share, according to LSEG data.

The Auburn Hills, Michigan-based company’s sales rose 12% to $3.62 billion, but came in below Wall Street’s expectations of $3.67 billion.

(Reporting by Nathan Gomes and Shivansh Tiwary in Bengaluru; Editing by Savio D’Souza)