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 ...

[First Quarter 2025 Results and Business Update](index=1&type=section&id=First%20Quarter%202025%20Results%20and%20Business%20Update) BorgWarner reported Q1 2025 financial results, including a slight sales decrease but improved adjusted operating margin and EPS, alongside strategic business exits and new contract awards [First Quarter Highlights](index=2&type=section&id=First%20Quarter%20Highlights) In Q1 2025, BorgWarner reported a 2% decrease in U.S. GAAP net sales to $3.515 billion, but achieved flat organic sales, outperforming its weighted markets which declined by 3.6% Q1 2025 Financial Performance (Continuing Operations) | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | U.S. GAAP Net Sales | $3,515 million | $3,595 million | ~ (2%) | | Organic Sales Growth | +0.1% | N/A | N/A | | U.S. GAAP Operating Margin | 6.7% | 8.2% | (150) bps | | Adjusted Operating Margin | 10.0% | 9.4% | +60 bps | | U.S. GAAP EPS | $0.72 | $0.93 | (22.6%) | | Adjusted EPS | $1.11 | $1.03 | +7.8% | | Net Cash from Operating Activities | $82 million | $(118) million | +$200 million | | Free Cash Flow | $(35) million | $(308) million | +$273 million | - Announced exit from the Charging business during Q2 2025, which is expected to eliminate approximately **$30 million** of annualized adjusted operating losses[3](index=3&type=chunk) - Consolidation of the North American Battery Systems business is expected to generate annual cost savings of approximately **$20 million** by 2026[3](index=3&type=chunk) - The company achieved market outgrowth of approximately **3.7%**, primarily driven by a **47%** year-over-year increase in light vehicle eProduct sales[3](index=3&type=chunk) [New Business Awards](index=1&type=section&id=New%20Business%20Awards) BorgWarner secured several key new business awards to support future growth, including hybrid eMotor contracts, HVCH awards, EGR component extensions, and DCT awards in China - Awarded a high-volume hybrid eMotor contract with a major North American OEM for full-size trucks, SUVs, and a performance vehicle, with launch expected in 2028[3](index=3&type=chunk) - Secured a high-voltage coolant heater (HVCH) award in North America with a global OEM for their PHEV lineup, including trucks, SUVs, and minivans, launching in 2027[3](index=3&type=chunk) - Obtained four program extensions for EGR components (valves, coolers, modules) with a major North American OEM, with production continuing through the end of 2029[3](index=3&type=chunk) - Won two dual-clutch transmission (DCT) awards in China, including a seven-year extension with a German OEM and a new award with a prominent transmission manufacturer[4](index=4&type=chunk) [Full Year 2025 Guidance Update](index=3&type=section&id=Full%20Year%202025%20Guidance%20Update) The company updated its full-year 2025 financial guidance, providing revised projections for net sales, adjusted operating margin, and adjusted EPS [Full Year 2025 Guidance](index=3&type=section&id=Full%20Year%202025%20Guidance) The company updated its full-year 2025 guidance, projecting net sales between $13.6 billion and $14.2 billion, with adjusted operating margin expected between 9.6% and 10.2% Full Year 2025 Guidance | Metric | Low Range | High Range | | :--- | :--- | :--- | | Net Sales | $13.6 billion | $14.2 billion | | Organic Sales Change | (2%) | +2% | | Adjusted Operating Margin | 9.6% | 10.2% | | Adjusted Net EPS | $4.00 | $4.45 | | Operating Cash Flow | $1,323 million | $1,375 million | | Free Cash Flow | $650 million | $750 million | - The company anticipates its weighted light and commercial vehicle markets to decline between **2%** and **4%** in 2025[10](index=10&type=chunk) - Sales guidance implies an estimated market outgrowth of **200 to 400 basis points**, an increase from previous guidance due to anticipated tariff customer recoveries[10](index=10&type=chunk) [Financial Statements](index=6&type=section&id=Financial%20Statements) This section provides detailed consolidated financial statements, including statements of operations, segment performance, balance sheets, and cash flows for the reported period [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For the first quarter of 2025, BorgWarner's net sales decreased to $3,515 million from $3,595 million, with operating income and net earnings also declining compared to Q1 2024 Q1 2025 vs Q1 2024 Statement of Operations (in millions, except per share) | Line Item | 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 from continuing operations | $0.72 | $0.93 | [Net Sales and Adjusted Operating Income by Reportable Segment](index=7&type=section&id=Net%20Sales%20and%20Adjusted%20Operating%20Income%20by%20Reportable%20Segment) In Q1 2025, PowerDrive Systems was the only segment with organic sales growth, while Turbos & Thermal Technologies and Drivetrain & Morse Systems remained key income contributors despite sales declines Q1 2025 Net Sales by Segment (in millions) | Segment | Q1 2025 Sales | Q1 2024 Sales | | :--- | :--- | :--- | | Turbos & Thermal Technologies | $1,454 | $1,574 | | Drivetrain & Morse Systems | $1,361 | $1,419 | | PowerDrive Systems | $561 | $436 | | Battery & Charging Systems | $150 | $177 | Q1 2025 Segment Adjusted Operating Income (in millions) | Segment | Q1 2025 Adj. Op. Income | Q1 2024 Adj. Op. Income | | :--- | :--- | :--- | | Turbos & Thermal Technologies | $235 | $228 | | Drivetrain & Morse Systems | $243 | $253 | | PowerDrive Systems | $(43) | $(62) | | Battery & Charging Systems | $(22) | $(15) | [Condensed Consolidated Balance Sheets](index=8&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2025, total assets were $13.83 billion and total liabilities were $7.94 billion, with a decrease in cash and an increase in stockholders' equity compared to year-end 2024 Balance Sheet Highlights (in millions) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash, cash equivalents and restricted cash | $1,707 | $2,094 | | Total current assets | $6,379 | $6,521 | | Total assets | $13,830 | $13,993 | | Total current liabilities | $3,230 | $3,646 | | Long-term debt | $3,803 | $3,763 | | Total liabilities | $7,940 | $8,287 | | Total BorgWarner Inc. stockholders' equity | $5,720 | $5,532 | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For Q1 2025, net cash from operating activities significantly improved to $82 million from a prior-year use of $118 million, while free cash flow also improved to negative $35 million Q1 Cash Flow Summary (in millions) | Cash Flow Item | 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) | | Free cash flow | $(35) | $(308) | [Non-GAAP Financial Measures and Reconciliations](index=9&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Reconciliations) This section details the non-GAAP financial measures used by BorgWarner, such as Adjusted Operating Income, Adjusted EPS, Free Cash Flow, and Organic Net Sales Change [Q1 2025 Non-GAAP Reconciliations](index=11&type=section&id=Q1%202025%20Non-GAAP%20Reconciliations) For Q1 2025, U.S. GAAP operating income of $237 million was reconciled to an adjusted operating income of $352 million after accounting for various non-comparable items Q1 2025 Reconciliation of Operating Income to Adjusted Operating Income (in millions) | Description | Amount | | :--- | :--- | | **Operating income (GAAP)** | **$237** | | Impairment charges | $39 | | Restructuring expense | $31 | | Costs to exit charging business | $26 | | Intangible asset amortization expense | $17 | | Other non-comparable items | $2 | | **Adjusted operating income (Non-GAAP)** | **$352** | Q1 2025 Organic Net Sales Change Reconciliation (in millions) | Description | Amount | | :--- | :--- | | **Q1 2024 Net Sales** | **$3,595** | | Foreign Exchange (FX) Impact | $(85) | | Organic Net Sales Change | $5 | | **Q1 2025 Net Sales** | **$3,515** | [Full-Year 2025 Guidance Reconciliations](index=12&type=section&id=Full-Year%202025%20Guidance%20Reconciliations) The full-year 2025 guidance reconciles projected GAAP operating income of $1,098M-$1,223M to an adjusted operating income of $1,310M-$1,445M, and GAAP EPS to adjusted EPS FY 2025 Guidance: Operating Income to Adjusted Operating Income (in millions) | Description | Low | High | | :--- | :--- | :--- | | **Operating income (GAAP)** | **$1,098** | **$1,223** | | Restructuring expense | $80 | $90 | | Intangible asset amortization | $65 | $65 | | Impairment charges | $39 | $39 | | Costs to exit charging business | $26 | $26 | | Other non-comparable items | $4 | $4 | | **Adjusted operating income (Non-GAAP)** | **$1,310** | **$1,445** | FY 2025 Guidance: EPS to Adjusted EPS | Description | Low | High | | :--- | :--- | :--- | | **Earnings per Diluted Share (GAAP)** | **$3.44** | **$3.85** | | Restructuring expense | $0.28 | $0.32 | | Impairment charges | $0.15 | $0.15 | | Costs to exit charging business | $0.11 | $0.11 | | Other non-comparable items | $0.02 | $0.02 | | **Adjusted Earnings per Diluted Share (Non-GAAP)** | **$4.00** | **$4.45** |

Company Overview & Strategy - BorgWarner has a vision for a clean, energy-efficient world and delivers innovative and sustainable mobility solutions[9, 10] - The company aims to outgrow end markets, build on its product portfolio, and drive enhanced financial performance[21] - BorgWarner leverages its core competencies through organic and inorganic investments[21] Financial Performance & Sustainability - In 2023, approximately 87% of BorgWarner's revenue came from EV and emissions-reducing hybrid and combustion products[24] - eProduct sales reached approximately $2 billion in 2023[25] - The company achieved a 32% reduction in scope 1 and 2 emissions since 2021 and targets a 25% reduction in Scope 3 emissions by 2030 versus a 2021 baseline[26] - Since 2020, BorgWarner has returned approximately $34 billion to shareholders, including buybacks exceeding $1 billion and shareholder dividends of approximately $696 million, and the market cap of PHINIA at spin-off was approximately $17 billion[49] Product Portfolio & Market Position - BorgWarner holds a 1 or 2 market share in foundational products and is growing share in several eProducts[19] - The estimated BorgWarner content opportunity per light vehicle increases from $548 for combustion engines to $2,569 for BEVs in 2027[28] - The company's foundational sales are approximately $12 billion in 2024[30]

Core Insights - The company reported a decrease in U.S. GAAP net sales of approximately 2% for the first quarter of 2025 compared to the same period in 2024, with net sales totaling $3,515 million [5][6][14] - Adjusted earnings per diluted share increased by approximately 8% to $1.11 in Q1 2025, up from $1.03 in Q1 2024, despite a decline in net earnings per diluted share from $0.93 to $0.72 [4][6] - The company has provided full-year 2025 guidance, expecting net sales between $13.6 billion and $14.2 billion, reflecting slight growth from 2024 sales of approximately $14.1 billion [7][8] Financial Performance - U.S. GAAP net earnings for Q1 2025 were $157 million, down from $213 million in Q1 2024, while adjusted net earnings were $1.11 per diluted share, an increase from $1.03 [6][14] - The company achieved an adjusted operating margin of 10.0% in Q1 2025, compared to a U.S. GAAP operating margin of 6.7%, reflecting a 60 basis point improvement year-over-year [5][6] - The company reported net cash provided by operating activities of $82 million for Q1 2025, a significant improvement from a net cash used of $(118) million in Q1 2024 [17] Business Developments - The company secured multiple new business awards, including a high-volume hybrid eMotor award and a high-voltage coolant heater award, which are expected to support long-term profitable growth [2][5] - The company plans to exit its Charging business, which is anticipated to eliminate approximately $30 million in annualized adjusted operating losses [5][6] - The company is consolidating its North American Battery Systems business, aiming for annual cost savings of approximately $20 million by 2026 [5] Market Outlook - The company expects its weighted light and commercial vehicle markets to decline by 4% to 2% in 2025, a revision from the previous estimate of down 3% to down 1% [7][8] - The sales guidance implies a year-over-year change in organic sales of down 2% to up 2%, with an estimated outgrowth above market production of approximately 200 to 400 basis points [7][8] - The company anticipates operating margins in the range of 8.1% to 8.6% for 2025, with adjusted operating margins expected to be between 9.6% and 10.2% [8]

Core Insights - BorgWarner has secured two significant contracts in China, enhancing its leadership in dual clutch modules for dual clutch transmissions (DCT) [1][2] - The company has extended its partnership with a German OEM for a DCT clutch assembly for an additional seven years, reflecting a decade of successful collaboration [1][6] - BorgWarner's DCT technology offers superior performance, including reduced rotational inertia and minimized friction losses, leading to enhanced transmission efficiency [1][6] Contract Details - A seven-year extension was granted for the DCT clutch assembly with a German OEM in China, emphasizing BorgWarner's strong product expertise in DCT technology for both traditional and mild hybrid vehicles [1] - A new DCT clutch program was secured with a prominent Chinese transmission manufacturer for a leading OEM's SUVs and sedans, with mass production set to begin by the end of 2025 [2] Product Advantages - The DCT clutch module produced in BorgWarner's Taicang facility features a compact design, superior thermal robustness, and outstanding cost-effectiveness, which enhances shifting performance under various conditions [2] - Improvements in BorgWarner's clutch assembly result in significantly reduced drag torque and a smoother driving experience [1][6] Commitment to Innovation - BorgWarner continues to lead in wet DCT technology, focusing on delivering competitive solutions that create added value for customers [3]

"BorgWarner has been collaborating with this global OEM on a variety of projects and is looking forward to furthering our relationship by providing this efficient solution for battery and cabin heating," said Dr. Volker Weng, Vice President of BorgWarner Inc. and President and General Manager, Turbos and Thermal Technologies. "Our HVCH technology compared to other heaters allows us to provide a solution that improves robustness and provides cost improvements for our customer without altering the overall veh ...

Core Insights - BorgWarner has secured a contract with a major North American OEM to supply its 400V SW130 (S-wind) eMotor for hybrid full-sized trucks and SUVs, with production set to begin in Q2 2028 [1][2] - The S-wind technology enhances power efficiency and performance while reducing costs and packaging sizes, making it a competitive solution in the hybrid vehicle market [2][3] Company Overview - BorgWarner has over 130 years of experience in mobility innovation, focusing on sustainable solutions to create a cleaner and safer future [4] Technology Details - The SW130 eMotor features a 130mm stator diameter and a 65mm stack length, optimizing peak torque and improving noise, vibration, and harshness [3] - S-wind technology utilizes a continuous rectangular formed winding design, which allows for better material usage and reduces welding points by over 90%, leading to increased scalability and flexibility [2][3]

Core Viewpoint - Wall Street anticipates a year-over-year decline in BorgWarner's earnings and revenues for the quarter ended March 2025, with a focus on how actual results compare to estimates impacting stock price [1][2]. Earnings Expectations - BorgWarner is expected to report quarterly earnings of $0.98 per share, reflecting a year-over-year decrease of 4.9% [3]. - Revenues are projected to be $3.39 billion, down 5.6% from the same quarter last year [3]. Estimate Revisions - The consensus EPS estimate has been revised 3.04% lower in the last 30 days, indicating a reassessment by analysts [4]. - A positive Earnings ESP of +1.39% suggests analysts have recently become more optimistic about BorgWarner's earnings prospects [10][11]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that a positive or negative reading can predict deviations from consensus estimates, with positive readings being more reliable [6][7]. - Stocks with a positive Earnings ESP and a Zacks Rank of 1, 2, or 3 have historically produced positive surprises nearly 70% of the time [8]. Historical Performance - BorgWarner has beaten consensus EPS estimates in the last four quarters, with a notable surprise of +9.78% in the last reported quarter [12][13]. Industry Context - In the Zacks Automotive - Original Equipment industry, Lear is expected to report earnings of $2.64 per share, down 17% year-over-year, with revenues of $5.56 billion, a decrease of 7.3% [17]. - Lear's consensus EPS estimate has been revised 5.6% lower, but a higher Most Accurate Estimate results in an Earnings ESP of 3.44%, combined with a Zacks Rank of 4, making predictions of an earnings beat uncertain [18].

Core Insights - BorgWarner will present its latest inverter technology at the 46th Vienna Motor Symposium from May 14-16, 2025, including a double-sided cooled (DSC) 800V SiC power module and a next-generation multi-level traction inverter [1][2] Group 1: Technology Advancements - The DSC power module is designed to maximize efficiency and enable smaller, high-performance inverters for battery electric vehicles (BEVs) [1][2] - The innovative design of the DSC power module improves thermal management and power conversion efficiency, allowing for more compact and sustainable solutions in vehicle electrification [2] - The power module enhances thermal performance by extracting heat from both sides of the silicon carbide power switch, leading to lower junction temperatures or higher current densities [2] Group 2: Market Context - The growing adoption of BEVs and hybrids necessitates advancements in efficiency and power density for vehicle electrification [2] - BorgWarner's technology supports high-power applications and compact designs, contributing to the future of sustainable mobility [2][3]