Core Viewpoint - BorgWarner shares have increased by approximately 3.3% over the past month, underperforming the S&P 500, raising questions about the sustainability of this trend leading up to the next earnings release [1] Earnings Estimates - Fresh estimates for BorgWarner have trended downward over the past month, indicating a negative outlook [2][4] VGM Scores - BorgWarner has a Growth Score of B and a Momentum Score of C, but it received an A for Value, placing it in the top quintile for this investment strategy. The overall aggregate VGM Score is A, which is significant for investors not focused on a single strategy [3] Industry Performance - BorgWarner is part of the Zacks Automotive - Original Equipment industry. Competitor Magna has seen a 4.7% increase in shares over the past month, despite reporting revenues of $10.07 billion for the last quarter, which reflects an 8.2% year-over-year decline [5] - Magna's expected earnings for the current quarter are $1.14 per share, representing a 15.6% decrease from the previous year, with a Zacks Consensus Estimate change of -0.6% over the last 30 days. Magna also holds a Zacks Rank 3 (Hold) and has a VGM Score of A [6]

Core Insights - The automotive parts industry is experiencing a divergence in performance in Q1 2025, with some companies showing improvement while others continue to struggle after significant profit declines in 2024 [1][2] Financial Performance Overview - **Magna**: Q1 revenue decreased by 8% to 100.69 billion RMB, but net profit surged from 9 million USD to 146 million USD, exceeding market expectations [2][4] - **Faurecia**: Achieved Q1 revenue of 67 billion RMB, a 2.6% increase, driven by growth in automotive electronics and seating divisions [3] - **Lear**: Reported a 7% decline in revenue to 55.6 billion RMB and a 26% drop in net profit, leading to the withdrawal of its 2025 financial forecast [5] - **Valeo**: Q1 revenue was 53.13 billion RMB, down 2%, primarily due to asset divestitures [10] - **LG Energy**: Turned a profit with Q1 revenue of 6.265 trillion KRW, a 2.2% increase, and net profit of 227 billion KRW, a 7% rise [7] - **Aptiv**: Revenue fell by 1.6% to 48.25 billion RMB, but operating profit increased by 7% to 4.48 billion RMB [4] Challenges and Strategic Responses - **Tariff Impact**: The introduction of a 25% tariff on imported vehicles and key automotive parts has prompted companies to negotiate cost pass-throughs with clients [9][10] - **Cost Management**: Companies like Magna and Faurecia are implementing cost-cutting measures and restructuring to mitigate the financial impact of tariffs [9][11] - **Operational Adjustments**: Lear is undergoing aggressive restructuring, including workforce reductions and automation to improve efficiency [5] - **Market Adaptation**: Companies are actively seeking to optimize supply chains and adjust production resources to manage tariff costs effectively [11][12]

Core Points - Isabelle McKenzie, Vice President and President and General Manager of Drivetrain and Morse Systems at BorgWarner, has been recognized as one of the 100 Leading Women in the North American Auto Industry by Automotive News [1][2] - The recognition highlights female leaders who have significant influence and make major decisions within their companies [3] - This year's list includes a diverse group of executives, including engineers, mobility leaders, and marketing executives, showcasing the breadth of female leadership in the automotive sector [3] Company Overview - BorgWarner has been a transformative global product leader in the automotive industry for over 130 years, focusing on mobility innovation and sustainability [7] - Isabelle McKenzie has been with BorgWarner since 2014, holding various leadership roles and contributing to the company's growth and innovation in the automotive sector [4] - The Automotive News list has honored a total of 442 executives over the past 25 years, reflecting the increasing representation of women in leadership positions within the industry [5][6]

If Newgarden does not win, the funds for the jackpot will roll over to the 2026 Indy 500, totaling at $40,000. About BorgWarner AUBURN HILLS, Mich., May 12, 2025 /PRNewswire/ -- The BorgWarner rolling jackpot has been reset to $20,000 after Josef Newgarden earned $440,000 with his Indianapolis 500 win in 2024. This year, Newgarden has the opportunity to make history as the first driver to win the Indy 500 three consecutive years and receive an additional $20,000. Additionally, team owner Roger Penske will l ...

Core Viewpoint - BorgWarner Inc. is facing significant challenges due to higher tariffs and rising selling, general and administrative (SG&A) expenses, leading to a recommendation to offload the stock from portfolios [1]. Group 1: Financial Performance and Guidance - The company has reduced its guidance for adjusted operating margin to a range of 9.6% to 10.2%, down from the previous estimate of 10.0% to 10.2%, reflecting a 20 basis point impact from higher tariffs [2]. - BorgWarner anticipates free cash flow of $650 million to $750 million in 2025, indicating a year-over-year decline of $29 million at the midpoint of the guidance [3]. - The Zacks Consensus Estimate for 2025 sales and earnings suggests a year-over-year decline of 2.57% and 2.78%, respectively, with earnings estimates for 2025 and 2026 moving down by 8 cents and 12 cents [6]. Group 2: Cost Structure and Debt - The company is experiencing high SG&A costs, which are expected to persist, alongside elevated research and development expenses related to electrification programs, limiting profit margins [3]. - BorgWarner's long-term debt increased to $3.8 billion as of March 31, 2025, up from $3.76 billion at the end of 2024, which restricts financial flexibility [4]. Group 3: Competitive Landscape - BorgWarner competes with larger manufacturers and distributors, including Robert Bosch GmbH, Denso Corporation, and others, which may have economic advantages such as lower labor costs and subsidies [5]. - Increased competition could negatively impact BorgWarner's business prospects [5].

PART I. Financial Information [Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) The company's financial statements for the three months ended March 31, 2025, show a decrease in net sales and net earnings compared to the same period in 2024, with positive cash flow from operations and a new segment reporting structure [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2025, total assets slightly decreased to $13.83 billion, while total liabilities decreased and total equity increased Condensed Consolidated Balance Sheet Highlights (in millions) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total current assets** | $6,379 | $6,521 | | **Total assets** | **$13,830** | **$13,993** | | **Total current liabilities** | $3,230 | $3,646 | | **Total liabilities** | **$7,940** | **$8,287** | | **Total equity** | **$5,890** | **$5,706** | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For Q1 2025, net sales decreased to $3.515 billion, operating income fell to $237 million, and net earnings attributable to BorgWarner were $157 million, resulting in diluted EPS of $0.72 Q1 2025 vs Q1 2024 Statement of Operations (in millions, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net sales | $3,515 | $3,595 | | Gross profit | $639 | $644 | | Operating income | $237 | $295 | | Net earnings attributable to BorgWarner Inc. | $157 | $206 | | Diluted EPS attributable to BorgWarner Inc. | $0.72 | $0.90 | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) In Q1 2025, the company generated $82 million in cash from operations, a significant improvement, while cash used in investing and financing activities led to a $387 million net decrease in cash Q1 2025 vs Q1 2024 Cash Flow Summary (in millions) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $82 | $(118) | | Net cash used in investing activities | $(94) | $(175) | | Net cash used in financing activities | $(397) | $(183) | | **Net decrease in cash** | **$(387)** | **$(497)** | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail significant accounting policies, including a new four-segment reporting structure, the financial impact of exiting the charging business, revenue disaggregation, restructuring plans, and debt information - Effective July 1, 2024, the company implemented a new four-segment reporting structure, recasting prior period information for Turbos & Thermal Technologies, Drivetrain & Morse Systems, PowerDrive Systems, and Battery & Charging Systems[21](index=21&type=chunk)[128](index=128&type=chunk) - The decision to exit the charging business in February 2025 resulted in **$65 million** in Q1 2025 charges, including estimated loss on sale, goodwill, and intangible asset impairments[34](index=34&type=chunk)[36](index=36&type=chunk)[70](index=70&type=chunk) Revenue Disaggregation by Product Type (in millions) | Product Type | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Foundational products | $2,878 | $3,089 | | eProducts | $637 | $506 | | **Total** | **$3,515** | **$3,595** | - Restructuring expenses totaled **$31 million** in Q1 2025, primarily from the 2024 and 2023 Structural Cost Plans[47](index=47&type=chunk)[155](index=155&type=chunk) - The company repaid its 3.375% senior notes upon maturity on March 15, 2025[78](index=78&type=chunk) - A lawsuit was filed against PHINIA to recover approximately **$120 million** in VAT refunds from the pre-spin-off period[119](index=119&type=chunk)[144](index=144&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=38&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses a 2% decline in Q1 2025 net sales to $3.5 billion, impacted by foreign currency and market production, offset by eProducts growth, with strong liquidity and a flat to modestly down 2025 sales outlook [Results of Operations](index=41&type=section&id=MD%26A%20-%20Results%20of%20Operations) Net sales for Q1 2025 decreased by $80 million to $3.515 billion due to foreign currency and market production, while operating income fell to $237 million due to impairment and restructuring charges - Net sales decreased **2% year-over-year** to **$3,515 million**, primarily due to a **$85 million** negative foreign currency impact and a **4%** decline in weighted average market production[153](index=153&type=chunk) - eProducts revenue grew to **$637 million** in Q1 2025, now representing **18%** of total revenue, up from **14%** in Q1 2024[141](index=141&type=chunk) - Operating income was impacted by non-comparable items totaling **$0.39 per diluted share**, including impairment charges, restructuring expenses, and costs to exit the charging business[168](index=168&type=chunk) [Results by Reportable Segment](index=44&type=section&id=MD%26A%20-%20Results%20by%20Reportable%20Segment) Turbos & Thermal Technologies and Drivetrain & Morse Systems saw sales declines, PowerDrive Systems sales grew significantly with a narrowed loss, while Battery & Charging Systems sales declined with a widened loss Segment Performance - Q1 2025 vs Q1 2024 (in millions) | Reportable Segment | Net Sales Q1 2025 | Net Sales Q1 2024 | Adj. Op. Income Q1 2025 | Adj. Op. Income Q1 2024 | Adj. Op. Margin % Q1 2025 | | :--- | :--- | :--- | :--- | :--- | :--- | | Turbos & Thermal Technologies | $1,454 | $1,574 | $235 | $228 | 16.2% | | Drivetrain & Morse Systems | $1,361 | $1,419 | $243 | $253 | 17.9% | | PowerDrive Systems | $561 | $436 | $(43) | $(62) | (7.7)% | | Battery & Charging Systems | $150 | $177 | $(22) | $(15) | (14.7)% | [Financial Condition, Capital Resources and Liquidity](index=46&type=section&id=MD%26A%20-%20Financial%20Condition,%20Capital%20Resources%20and%20Liquidity) The company maintained strong liquidity of $3.7 billion, with $82 million in cash from operations, and used $397 million in financing activities primarily for debt repayment - Total liquidity as of March 31, 2025, was **$3,707 million**, consisting of **$1,707 million** in cash and a **$2,000 million** undrawn credit facility[177](index=177&type=chunk) - Net cash provided by operating activities was **$82 million**, a significant improvement from **$118 million** cash used in Q1 2024, driven by adjusted net earnings and working capital changes[185](index=185&type=chunk) - Financing activities included a **$346 million** debt repayment for matured senior notes and **$24 million** in dividend payments[187](index=187&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=49&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is foreign currency exchange rate fluctuations, particularly for the Euro, Chinese Renminbi, and Brazilian Real, which is mitigated through various strategies and derivative instruments - The company's most significant market risk is foreign currency exchange rate risk, primarily exposed to the **Euro**, **Chinese Renminbi**, and **Brazilian Real**[196](index=196&type=chunk)[198](index=198&type=chunk) - As of March 31, 2025, a deferred gain of **$153 million** (before tax) for designated hedges was recorded in accumulated other comprehensive income[196](index=196&type=chunk) [Controls and Procedures](index=50&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded the company's disclosure controls and procedures are **effective** as of the reporting period end[200](index=200&type=chunk) - No material changes to internal control over financial reporting occurred during Q1 2025[201](index=201&type=chunk) PART II. Other Information [Legal Proceedings](index=51&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal claims in the normal course of business, which management does not expect to have a material adverse effect on its financial position - The company is party to various legal proceedings but does not expect a **material adverse effect** on its financial condition[204](index=204&type=chunk) [Risk Factors](index=51&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors from the 2024 Form 10-K, except for an updated risk concerning administrative policy changes, particularly tariffs, which could impact costs, supply chain, and demand - The risk factor for tariffs and trade policy has been updated, highlighting that changes in administrative policies could adversely affect the company's supply chain, costs, and product demand[206](index=206&type=chunk) - In 2024, the company imported approximately **$875 million** in value to the U.S., with **55%** from Mexico and about **10%** each from Canada and South Korea[207](index=207&type=chunk) [Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities](index=52&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities,%20Use%20of%20Proceeds,%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company did not repurchase shares under its common stock repurchase program in Q1 2025, with $467 million remaining available for future repurchases - No shares were repurchased under the common stock repurchase program in Q1 2025[210](index=210&type=chunk) - As of March 31, 2025, **$467 million** remained available for future repurchases under the plan authorized through December 31, 2027[208](index=208&type=chunk)[210](index=210&type=chunk) [Other Information](index=52&type=section&id=Item%205.%20Other%20Information) No director or Section 16 officer adopted or terminated a Rule 10b5-1 trading arrangement during the first quarter of 2025 - No director or Section 16 officer adopted or terminated a Rule 10b5-1 trading arrangement during Q1 2025[211](index=211&type=chunk) [Exhibits](index=53&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including stock incentive plans, officer certifications, and Inline XBRL data files - The report includes filed exhibits such as management compensation plans, CEO/CFO certifications, and XBRL data files[212](index=212&type=chunk)

BorgWarner (BWA) Q1 2025 Earnings Call May 07, 2025 09:30 AM ET Company Participants Patrick Nolan - Vice President, Investor RelationsJoseph Fadool - President & CEOCraig Aaron - Executive VP & CFOJohn Murphy - Managing DirectorJoseph Spak - Managing DirectorWinnie Dong - Director, Equity Research Conference Call Participants Colin Langan - Automotive & Mobility AnalystJames Picariello - Director & Sr. Automotive AnalystDan Levy - Senior Equity Research AnalystMark Delaney - AnalystEmmanuel Rosner - Managi ...

BorgWarner (BWA) Q1 2025 Earnings Call May 07, 2025 09:30 AM ET Speaker0 Good morning. My name is Wyatt, and I will be your conference specialist. At this time, I would like to welcome everyone to the BorgWarner twenty twenty five First Quarter Results Conference Call. All participants will be in listen only mode. I would now like to turn the call over to Patrick Nolan, Vice President of Investor Relations. Mr. Nolan, you may begin your conference. Speaker1 Thank you, Wyatt. Good morning, everyone. Thank yo ...

Core Insights - BorgWarner (BWA) reported adjusted earnings of $1.11 per share for Q1 2025, exceeding the Zacks Consensus Estimate of 98 cents and increasing from $1.03 in the prior-year quarter, driven by better-than-expected performance in the Turbos & Thermal Technologies unit [1] - The company achieved net sales of $3.52 billion, surpassing the Zacks Consensus Estimate of $3.39 billion, although this represented a 2% decline year over year [1] Segment Performance - **Turbos & Thermal Technologies**: Net sales were $1.45 billion, down from $1.57 billion year-over-year and below the Zacks Consensus Estimate of $1.49 billion. Adjusted operating income increased to $235 million from $228 million, beating the estimate of $222.7 million [2] - **Drivetrain & Morse Systems**: Net sales totaled $1.36 billion, down from $1.42 billion year-over-year and missing the Zacks Consensus Estimate of $1.37 billion. Adjusted operating income decreased to $243 million from $253 million, falling short of the estimate of $247.9 million [3] - **PowerDrive Systems**: Sales increased to $561 million from $436 million year-over-year, exceeding the Zacks Consensus Estimate of $396 million. The segment reported an adjusted operating loss of $43 million, which was narrower than the loss of $62 million in the same period of 2024 but wider than the estimate of a loss of $30.8 million [4] - **Battery & Charging Systems**: Sales decreased to $150 million from $177 million year-over-year, missing the Zacks Consensus Estimate of $234.5 million. The segment incurred an adjusted operating loss of $22 million, wider than the loss of $15 million in the prior year and the estimate of a loss of $15.5 million [5] Financial Position - As of March 31, 2025, BorgWarner had $1.70 billion in cash and equivalents, down from $2.09 billion as of December 31, 2024. Long-term debt increased to $3.80 billion from $3.76 billion [6] - Net cash provided by operating activities was $82 million, compared to a net cash used of $118 million in the same quarter of 2024. Capital expenditures were $119 million, resulting in negative free cash flow of $35 million [7] 2025 Guidance - BorgWarner revised its full-year 2025 guidance, now expecting net sales in the range of $13.6-$14.2 billion, up from the previous estimate of $13.4-$14 billion [8] - Adjusted operating margin is projected to be between 9.6-10.2%, an increase from the prior guidance of 9.1-9.2%. Adjusted earnings per share are now estimated to be in the range of $4-$4.45, compared to the previous estimate of $4.05-$4.40 [9]

BorgWarner (BWA) came out with quarterly earnings of $1.11 per share, beating the Zacks Consensus Estimate of $0.98 per share. This compares to earnings of $1.03 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 13.27%. A quarter ago, it was expected that this auto parts supplier would post earnings of $0.92 per share when it actually produced earnings of $1.01, delivering a surprise of 9.78%.Over the last four quarters, the com ...