Auburn Hills, Michigan, July 31, 2025 – BorgWarner Inc. (NYSE: BWA) today reported second quarter results and updated 2025 guidance.
Second Quarter Results and Business Update
- BorgWarner’s (the “Company”) U.S. GAAP net sales increased approximately 1.0%, while organic sales were relatively flat, year-over-year compared with second quarter 2024. This performance was roughly in line with the Company’s weighted light and commercial vehicle markets. The Company’s light vehicle eProduct sales increased 31% year-over-year.
- The Company achieved a U.S. GAAP operating margin of 7.9% during the second quarter of 2025, which equated to an adjusted operating margin of 10.3%. The Company’s solid conversion on higher light vehicle eProduct sales and focus on cost controls allowed it to deliver strong performance despite a 40 basis point net headwind from tariffs.
- The Company announced several actions that are intended to drive long-term shareholder value as part of the Company’s balanced capital allocation approach. These actions include:
- The Company purchased approximately $108 million of its outstanding shares during the second quarter.
- BorgWarner’s Board of Directors authorized an increase to its share repurchase program to $1 billion, allowing management to repurchase BorgWarner outstanding shares through 2028.
- The Company’s Board of Directors approved a 55% increase to its quarterly cash dividend per share.
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 turbocharger awards with a major global OEM. The first award is for a 1.0-liter engine for gasoline and hybrid platforms used in compact and light commercial vehicles in Europe. The second award is for a 3.0-liter gasoline hybrid application in North America. Production is expected to begin in 2027 and 2028, respectively.
- Turbocharger award with a major East Asian OEM for its hybrid electric vehicle SUV applications. Production is expected to begin in 2027.
- Turbocharger award with a major global OEM for use in a hybrid powertrain for a sports car platform. Production is expected to begin in 2028.
eProduct Awards
- Dual inverter award with a major Chinese OEM for its hybrid vehicle lineup, extending the partnership established in 2021. Production is expected to begin by the end of 2025.
- Electric motor award with a major Chinese OEM for a platform-based design compatible across a full range of NEV applications, including battery electric and hybrid models. Production is expected to begin in 2026.
- BorgWarner has secured contracts with two major global OEMs to supply high-voltage coolant heater technology for plug-in hybrid electric vehicle platforms. Production is expected to begin in 2028 for both OEMs.
- BorgWarner has secured a new program for its electric cross differential technology for a leading Chinese OEM’s electric vehicles in China.
Second Quarter Highlights (continuing operations basis):
- U.S. GAAP net sales of $3,638 million, an increase of approximately 1% compared with second quarter 2024.
- Excluding the impact of foreign currencies, organic sales were relatively flat compared with second quarter 2024.
- U.S. GAAP net earnings of $1.03 per diluted share.
- Excluding $(0.18) of net losses per diluted share related to non-comparable items (detailed in the table below), adjusted net earnings were $1.21 per diluted share.
- U.S. GAAP operating income of $289 million, or 7.9% of net sales.
- Excluding $84 million of pretax expenses related to non-comparable items, adjusted operating income was $373 million, or 10.3% of net sales.
- Net cash provided by operating activities of $579 million.
- Free cash flow of $507 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 $3,638 million for the second quarter 2025, an increase of approximately 1% compared with the second quarter 2024, primarily due to strong eProduct sales growth, partially offset by lower market production volumes. Net earnings for the second quarter 2025, were $224 million, or $1.03 per diluted share, compared with net earnings of $315 million, or $1.39 per diluted share for the second quarter 2024. Adjusted net earnings per diluted share for the second quarter 2025, were $1.21, up approximately 2% from adjusted net earnings per diluted share of $1.19 for the second quarter 2024. Adjusted net earnings for the second quarter 2025, excluded net non-comparable items of $(0.18) per
diluted share, while adjusted net earnings for the second quarter 2024, excluded net non-comparable items of $0.20 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 a lower share count.
Full Year 2025 Guidance Update: The Company has increased its 2025 full year guidance. The Company expects net sales to be in the range of $14.0 billion to $14.4 billion in 2025, compared with 2024 sales of approximately $14.1 billion. The increase from the Company’s previous range of $13.6 billion to $14.2 billion is a result of higher industry production expectations and the favorable impacts from foreign exchange, partially offset by lower customer tariff cost recoveries. The Company expects its weighted light and commercial vehicle markets to be in the range of down 2.5% to down 0.5% in 2025. This is an increase from the Company’s prior range of down 4% to down 2%. The Company’s sales guidance implies a year-over-year change in organic sales of down 1.5% to up 1% or estimated outgrowth above market production of approximately 100 to 150 basis points. Stronger foreign currencies primarily due to the Euro and Korean Won are expected to result in an increase in sales of $300 million compared to the Company’s previous guidance.
The Company expects its U.S. GAAP operating margin to be in the range of 8.3% to 8.5% 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 10.1% to 10.3%, which includes a 10 basis point dilutive impact from anticipated customer tariff recoveries. The change compared to the Company’s previous adjusted operating margin range of 9.6% to 10.2% is due to strong year to date results, higher expected industry production and a less dilutive impact for anticipated customer tariff recoveries on the Company’s margin profile. Net earnings are expected to be within the range of $3.80 to $3.97 per diluted share. Excluding the impact of non-comparable items, adjusted net earnings are expected to be in the range of $4.45 to $4.65 per diluted share, compared to the Company’s previous adjusted net earnings range of $4.00 to $4.45 per diluted share. Full-year operating cash flow is expected to be in the range of $1,368 million to $1,418 million, and free cash flow is expected to be in the range of $700 million to $800 million, which is a $50 million increase from prior guidance.
At 9:30 a.m. ET today, a brief conference call concerning second quarter 2025 results and guidance will
be webcast at: https://www.https://www.borgwarner.com/investors.com/investors. Additionally, an earnings call presentation will be available at https://www.borgwarner.com/investors.