BorgWarner Reports Strong Third Quarter Results
Returned $136 million to Stockholders During Third Quarter
Announces Increased 2025 Guidance
BorgWarner Inc. (NYSE: BWA) has recently shared its impressive results for the third quarter, showcasing a solid performance in an ever-competitive automotive landscape.
Third Quarter Results and Business Update
BorgWarner, known for its innovation in mobility solutions, reported that its U.S. GAAP net sales jumped by approximately 4.1%, while organic sales saw an increase of around 2.1% year-over-year when compared to the same period in the previous year.
Despite challenges such as a 60 basis point net headwind from tariffs, the company achieved a U.S. GAAP operating margin of 6.9% during this quarter. The adjusted operating margin climbed to 10.7%, reflecting a 60 basis points improvement from the third quarter of the previous year. This resilience is attributed to the firm’s effective management in responding to higher sales and stringent cost control measures.
During this quarter, BorgWarner made a significant return to its stockholders, totaling $136 million. This included the repurchase of approximately $100 million worth of outstanding shares and a cash dividend payment of $36 million.
New Business Awards Across Portfolio
In addition to its solid financial performance, BorgWarner secured several new business awards that promise to further bolster its growth trajectory:
Foundational Awards
- Secured contracts for two all-wheel drive systems with a major OEM, with production expected to commence in 2027.
- A notable contract for variable turbine geometry (VTG) turbochargers for Stellantis’ Hurricane 4 engine, set to feature in the 2026 Jeep Grand Cherokee.
- Acquired an electric variable cam timing technology contract for use in the future engines of Jeep Cherokee models.
eProduct Awards
- A significant award to supply a 7-in-1 integrated drive module for a leading Chinese electric vehicle manufacturer with expected production starting in 2026.
- Another two contracts for dual inverter programs with Great Wall Motor for hybrid vehicles expected to begin production in 2026.
- BorgWarner will also supply battery systems for the all-new HOLON Urban autonomous shuttle, projected to commence production in 2027.
Financial Highlights of the Third Quarter
The following highlights reflect the performance on a continuing operations basis:
- U.S. GAAP net sales reached $3,591 million, marking a 4.1% increase compared to the previous year.
- The company reported U.S. GAAP net earnings of $0.73 per diluted share, while adjusted net earnings increased to $1.24 per diluted share, up 14% from last year.
- Operating income totaled $248 million or 6.9% of net sales, with an adjusted operating income of $385 million, equating to 10.7% of net sales.
Cash flow from operating activities was $368 million, contributing to a free cash flow amounting to $266 million.
2025 Guidance Update
As a result of the strong performance and higher industry production expectations, BorgWarner has updated its full-year guidance for 2025:
- Net sales are projected to be between $14.1 billion and $14.3 billion, slightly narrowing previous estimates. This reflects a stable market expectation and adverse impacts accounted for due to foreign exchange.
- Operating margins are anticipated to range from 7.8% to 7.9%, while the adjusted operating margin targets are set between 10.3% to 10.5%.
- Expected net earnings per diluted share for 2025 are forecasted between $3.52 to $3.63, with adjusted earnings projected to increase to between $4.60 to $4.75 per diluted share.
- The company anticipates free cash flow within the range of $850 million to $950 million, marking a $150 million increase from prior forecasts.
Todays' announcement marks a pivotal moment for BorgWarner as it showcases resilience and a forward-looking approach amidst market challenges.
For over 130 years, BorgWarner has established itself as a transformative leader within the industry, leading the way in mobility innovation while continuously focusing on building a sustainable future.
Frequently Asked Questions
What were BorgWarner's earnings per share for the third quarter?
BorgWarner reported earnings of $0.73 per diluted share, with adjusted net earnings of $1.24 per diluted share for the third quarter.
How much did BorgWarner return to its stockholders in Q3?
The company returned a total of $136 million to its stockholders during the third quarter, including share repurchases and cash dividends.
What is the updated sales outlook for 2025?
BorgWarner expects net sales for 2025 to be in the range of $14.1 billion to $14.3 billion, reflecting improved industry production expectations.
What new business contracts did BorgWarner secure?
BorgWarner secured various contracts, including those for all-wheel drive systems and eProduct solutions, supporting future production in key markets.
How has the company addressed global market challenges?
The company has implemented cost control measures and focused on innovative solutions to mitigate the impact of tariffs and economic fluctuations.
