Auburn Hills, Michigan, October 30, 2025 – BorgWarner Inc. (NYSE: BWA) today reported third quarter results and increased 2025 guidance.
Third Quarter Results and Business Update
- BorgWarner’s (the “Company”) U.S. GAAP net sales increased approximately 4.1%, while organic sales increased approximately 2.1%, year-over-year compared with third quarter 2024.
- The Company achieved a U.S. GAAP operating margin of 6.9% during the third quarter of 2025, which equated to an adjusted operating margin of 10.7% or an increase of 60 basis points compared with third quarter 2024. The Company’s solid conversion on higher sales and focus on cost controls allowed it to deliver strong performance despite a 60 basis point net headwind from tariffs.
- The Company returned $136 million to its stockholders during the third quarter. This includes the purchase of approximately $100 million of outstanding shares and a $36 million cash dividend payment.
New Business Awards Across Portfolio
The Company secured multiple new business awards that are expected to support its long-term profitable growth, these include the following:
Foundational Awards
- Two all-wheel drive contracts with Chery. One for on-demand transfer cases with mechanical lock (Mlock TOD) for pickup truck vehicles, and another for cross wheel drive (XWD) system for SUV models. Production is expected to begin in 2027.
- Variable turbine geometry (VTG) turbocharger award with Stellantis for the OEM’s Hurricane 4, a 4-cylinder gasoline engine. This turbocharger will be featured on the automaker’s 2026 Jeep® Grand Cherokee.
- Electric variable cam timing (eVCT) technology award with Stellantis for use on the OEM’s Jeep Cherokee engine.
eProduct Awards
- A contract to supply a 7-in-1 integrated drive module (iDM) to a leading Chinese OEM. Exclusively designed for the customer’s hybrid SUV, BorgWarner’s iDM integrates multiple functions within a single compact unit to boost overall system performance and efficiency. Production is expected to begin in 2026.
- Two dual inverter programs awards with Great Wall Motor for HEV and PHEV vehicles. Production is expected to begin in 2026.
- Battery system for the all-new HOLON Urban, a 15-person, Level 4 autonomous, fully electric shuttle. The battery system features the latest generation cell chemistry and benchmark-setting energy density. Production is expected to begin in 2027.
Third Quarter Highlights (continuing operations basis):
- U.S. GAAP net sales of $3,591 million, an increase of approximately 4.1% compared with third quarter 2024.
- Excluding the impact of foreign currencies, organic sales increased 2.1% compared with third quarter 2024.
- U.S. GAAP net earnings of $0.73 per diluted share.
- Excluding $0.51 of net losses per diluted share related to non-comparable items (detailed in the table below), adjusted net earnings were $1.24 per diluted share, an increase of 14% compared with third quarter 2024.
- U.S. GAAP operating income of $248 million, or 6.9% of net sales.
- Excluding $137 million of pretax expenses related to non-comparable items, adjusted operating income was $385 million, or 10.7% of net sales.
- Net cash provided by operating activities of $368 million.
- Free cash flow of $266 million.
Financial Results (continuing operations basis):
The Company believes the following table is useful in highlighting non-comparable items that impacted its U.S. GAAP net earnings per diluted share. The non-comparable items presented below are calculated after tax using the corresponding effective tax rate discrete to each item and the weighted average number of diluted shares for the periods presented. The Company defines adjusted earnings per diluted share as earnings per diluted share adjusted to eliminate the impact of restructuring expense, merger, acquisition and divestiture expense, other net expenses, discontinued operations and other gains and losses not reflective of the Company’s ongoing operations and related tax effects.
Net sales were $3,591 million for the third quarter 2025, an increase of approximately 4.1% compared with the third quarter 2024. This increase was primarily due to higher market production volumes and light vehicle eProduct sales growth, partially offset by lower battery and charging sales and downtime at one of the Company’s European customers due to a cyber related shutdown. Net earnings for the third quarter 2025, were $158 million, or $0.73 per diluted share, compared with net earnings of $242 million, or $1.08 per diluted share for the third quarter 2024. Adjusted net earnings per diluted share for the third quarter 2025, were $1.24, up approximately 14% from adjusted net earnings per diluted share of $1.09 for the third quarter 2024. Adjusted net earnings for the third quarter 2025, excluded net non-comparable items of $(0.51) per diluted share, while adjusted net earnings for the third quarter 2024, excluded net noncomparable items of $(0.01) per diluted share. These and other non-comparable items are listed in the table above, which is provided by the Company for comparison with other results and the most directly comparable U.S. GAAP measures. The increase in adjusted net earnings per diluted share was primarily due to higher adjusted operating income and the impact of a lower share count.
Full Year 2025 Guidance Update: The Company has increased its 2025 full year margin, EPS and free cash flow guidance, and narrowed its net sales outlook. The Company expects net sales to be in the range of $14.1 billion to $14.3 billion in 2025, compared with 2024 sales of approximately $14.1 billion. The change from the Company’s previous forecast range of $14.0 billion to $14.4 billion is a result of higher industry production expectations and the favorable impacts of foreign exchange, partially offset by customer production disruptions in North America and Europe. The Company expects its weighted light and commercial vehicle markets to be in the range of down 1% to approximately flat in 2025. This is an increase from the Company’s prior range of down 2.5% to down 0.5%. The Company’s sales guidance implies a year-over-year change in organic sales of down 1% to approximately flat or in line with estimated market production. Stronger foreign currencies primarily due to the Euro are expected to result in an increase in sales of $30 million compared to the Company’s previous guidance.
The Company expects its U.S. GAAP operating margin to be in the range of 7.8% to 7.9% in 2025. Excluding the impact of non-comparable items and the add back of intangible asset amortization expense, adjusted operating margin is expected to be in the range of 10.3% to 10.5%. The increase compared to the Company’s previous adjusted operating margin range of 10.1% to 10.3% is due to strong year-to-date results and on-going cost performance measures. Net earnings are expected to be within the range of $3.52 to $3.63 per diluted share. Excluding the impact of non-comparable items, adjusted net earnings are expected to increase and be in the range of $4.60 to $4.75 per diluted share, compared to the Company’s previous adjusted net earnings range of $4.45 to $4.65 per diluted share. Full-year operating cash flow is expected to be in the range of $1,434 million to $1,484 million, and free cash flow is expected to be in the range of $850 million to $950 million, which is a $150 million increase from prior guidance.
At 9:30 a.m. ET today, a brief conference call concerning third quarter 2025 results and guidance will be webcast at: https://www.borgwarner.com/investors. Additionally, an earnings call presentation will be available at https://www.borgwarner.com/investors.
