BWA · BorgWarner Inc.

BorgWarner's first quarter 2026 results demonstrated resilience amid a challenging industry production environment. Net sales of $3,533 million increased approximately 1% year-over-year, driven by favorable foreign currency translation, which offset a 4.2% decline in organic sales. The organic decline was primarily due to lower market production volumes and reduced sales in the Battery Energy Systems segment. Despite the top-line headwinds, the company improved its adjusted operating margin by 50 basis points to 10.5%, reflecting disciplined cost controls. GAAP operating margin was 9.5%, impacted by $36 million in non-comparable items including restructuring expenses. Net earnings attributable to BorgWarner rose to $242 million ($1.16 per diluted share) from $157 million ($0.72 per diluted share) in the prior year, with adjusted EPS of $1.24 up 12% year-over-year, aided by lower share count from repurchases. The company returned $185 million to shareholders through $150 million in share buybacks and $35 million in dividends. Management highlighted strong execution and secured 12 new business awards across its portfolio, including eMotor, turbocharger, and controller programs, supporting long-term profitable growth. For full-year 2026, BorgWarner maintained its guidance, expecting net sales of $14.0-$14.3 billion, adjusted operating margin of 10.7%-10.9%, and adjusted EPS of $5.00-$5.20. The guidance implies organic sales decline of 1.5%-3.5%, with a $210 million headwind from Battery Energy Systems and a $200 million tailwind from foreign exchange. Free cash flow is expected between $900 million and $1.1 billion. The maintained guidance suggests management confidence in achieving margin expansion and earnings growth despite market uncertainties.