BorgWarner Inc., the supplier of turbocharger and emissions systems, reported a net loss of $293 million in the fourth quarter of 2016 as it announced a one-time asbestos-related charge of $441 million.
The company said adjusted earnings were up 8.7 percent to $339 million.
Revenue in the quarter rose 6.4 percent to $2.3 billion, up from $2.1 billion in the year-earlier period, driven by a 20 percent increase in its drivetrain division sales.
Drivetrain division sales totaled $883 million in the quarter, up from $735 million in the year-earlier period.
Engine segment sales dipped 0.7 percent to $1.38 billion, compared with $1.39 billion.
Asbestos charge
BorgWarner’s fourth-quarter results included an after-tax one-time non-cash charge of $441 million for “indemnity and defense costs for pending and future asbestos-related claims.”
The supplier said the figure was “based on an undiscounted estimate of indemnity and defense costs that may be incurred at one of the company’s subsidiaries on account of pending and potential future asbestos-related claims that may be asserted for the next 50 years.”
In a related filing, BorgWarner said: “We have in the past been named in a significant number of lawsuits each year alleging injury related to exposure to asbestos in certain of our historical products. We no longer manufacture, distribute, or sell products that contain asbestos, and we vigorously defend against asbestos-related claims. Over 80 percent of claims asserted against us in recent years have been resolved with no payment to the claimant.”
For the year, adjusted earnings rose 7.8 percent to $1.3 billion, up from $1.19 billion. Net income was $118.5 million, dropping from $610 million in 2015.
Net revenue, however, rose to $9.1 billion, up from $8 billion.
BorgWarner, of Auburn Hills, Mich., ranks No. 28 on Automotive News’ list of the top 100 global suppliers.
