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Borg Assimilates Rivals' Market Share

By Rich Smith
October 27, 2005

To judge from the headlines, future historians could well peg 2005 as the year that America's auto industry died. Parts-maker Delphi has filed for bankruptcy. Competitors Visteon (NYSE: VC) and Dana (NYSE: DCN) have been unprofitable over the past twelve months. Customers GM (NYSE: GM) and Ford (NYSE: F) are reporting hundreds of millions of dollars in losses.

Yet all is not lost. At least one company in this industry still knows how to make a profit: Motley Fool Stock Advisor recommendation BorgWarner (NYSE: BWA), which reported its Q3 2005 earnings yesterday. Judging from those results, BorgWarner also knows how to make its profits bigger over time. Compared to last year's numbers, BorgWarner upped both sales and profits by 25%. That's without even considering the $0.08 worth of favorable tax adjustments that the company received in Q3 2005. With those included, GAAP net profits jumped 35%. Nice results, and they confirm the wisdom of the company's Q1 acquisition of a 70% stake in diesel expert Beru Aktiengesellschaft. Without Beru's contribution, sales would have risen just 11% year over year....
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