BorgWarner Suspends Quarterly Dividend
- March 6, 2009
- Dividend News
- Add a comment
BorgWarner (BWA: 43.86 +3.25%) announced yesterday that they are suspending their quarterly dividend of $.12 per share in an effort to conserve cash.
The auto parts manufacturer has seen profits erode as the auto sector has come crashing down in recent months. Wall Street is expecting the company to report a fourth quarter loss and for profits to fall 35% in 2009.
Since the beginning of the year, the stock has fallen 27%. In 2008, the shares fell 55%.
‘We are facing an unprecedented discontinuity in the marketplace,’ said Timothy Manganello, Chairman and CEO of the company. ‘We continue to expect positive earnings and positive cash flow from operations for the full year 2009 based on our previously stated auto industry production assumptions. We will continue to reduce costs and to carefully manage liquidity to position ourselves well for the future. Our balance sheet remains strong and this action will further strengthen our cash flow by $60 million annually. We intend to reinstate our dividend as soon as the automotive industry returns to a normalized level of activity.’
Shares were down 2% in early morning trading to $15.60 on news of the dividend cut.
