Core Insights - BorgWarner (BWA) reported adjusted earnings of $1.24 per share for Q3 2025, exceeding the Zacks Consensus Estimate of $1.16 and up from $1.09 in the prior-year quarter, driven by strong performance in the Turbos & Thermal Technologies segment [1][10] - The company reported net sales of $3.59 billion, a 4.1% year-over-year increase, but fell short of the Zacks Consensus Estimate of $3.63 billion [1] Segment Performance - **Turbos & Thermal Technologies**: Net sales reached $1.44 billion, up from $1.39 billion year-over-year, surpassing the Zacks Consensus Estimate of $1.38 billion. Adjusted operating income increased to $219 million from $202 million, exceeding the estimate of $213.3 million [2] - **Drivetrain & Morse Systems**: Net sales were $1.45 billion, up from $1.37 billion year-over-year, beating the Zacks Consensus Estimate of $1.36 billion. Adjusted operating income rose to $267 million from $251 million but missed the estimate of $299.4 million [3] - **PowerDrive Systems**: Sales totaled $582 million, an increase from $512 million year-over-year, but missed the Zacks Consensus Estimate of $670 million. The segment reported an adjusted operating loss of $35 million, wider than the loss of $19 million in the prior year [4] - **Battery & Charging Systems**: Sales were $132 million, down from $197 million a year ago, missing the Zacks Consensus Estimate of $172 million. The segment incurred an adjusted operating loss of $7 million, which was narrower than the loss of $8 million in the previous year [5] Financial Overview - As of September 30, 2025, BorgWarner had $2.17 billion in cash and equivalents, up from $2.09 billion at the end of 2024. Long-term debt increased to $3.9 billion from $3.8 billion [6] - Net cash provided by operating activities was $368 million, with capital expenditures totaling $111 million and free cash flow at $266 million [6] 2025 Guidance - The company revised its full-year 2025 net sales guidance to a range of $14.1-$14.3 billion, down from the previous estimate of $14-$14.4 billion. Adjusted operating margin is now expected to be between 10.3-10.5%, an increase from the earlier guidance of 10.1-10.3% [7] - Adjusted earnings per share are now estimated to be in the range of $4.60-$4.75, up from $4.45-$4.65. Operating cash flow is forecasted to be between $1,434-$1,484 million, an increase from the prior range of $1,368-$1,418 million. Free cash flow is projected to be $850-$950 million, up from the previous forecast of $700-$800 million [8]

Financial Performance - Net sales for Q3 2025 were $3,591 million, a 4.1% increase from $3,449 million in Q3 2024[13] - Gross profit for Q3 2025 was $664 million, compared to $636 million in Q3 2024, reflecting a gross margin of 18.5%[13] - Net earnings attributable to BorgWarner Inc. for Q3 2025 were $158 million, down from $234 million in Q3 2024, resulting in earnings per share of $0.74[13][14] - Total revenue for the three months ended September 30, 2025, was $3,591 million, a 4.1% increase from $3,449 million in the same period of 2024[45] - For the nine months ended September 30, 2025, total revenue was $10,744 million, a 0.9% increase from $10,647 million in the same period of 2024[45] - Net sales for the nine months ended September 30, 2025, totaled $10,744 million, compared to $10,647 million for the same period in 2024, indicating a growth of approximately 0.9%[122] - The company reported net earnings from continuing operations of $576 million for the nine months ended September 30, 2025, down from $814 million in the same period of 2024, representing a decline of 29.2%[161] - The Company’s earnings per diluted share were $0.73 for the three months ended September 30, 2025, down from $1.08 in 2024, and $2.48 for the nine months ended September 30, 2025, compared to $3.40 in 2024[204] Assets and Liabilities - Total assets increased to $14,496 million as of September 30, 2025, up from $13,993 million at the end of 2024[12] - Total liabilities increased slightly to $8,346 million as of September 30, 2025, from $8,287 million at the end of 2024[12] - The company reported a total long-term debt of $3,897 million as of September 30, 2025, down from $4,100 million at the end of 2024[92] - Total inventories as of September 30, 2025, were $1,231 million, a slight decrease from $1,251 million as of December 31, 2024[80] - The net goodwill balance as of September 30, 2025, was $2,459 million, an increase from $2,357 million as of December 31, 2024[88] Cash Flow and Expenditures - Cash provided by operating activities of continuing operations for the nine months ended September 30, 2025, was $1,029 million, compared to $700 million in the same period of 2024[17] - Capital expenditures for the nine months ended September 30, 2025, were $307 million, down from $510 million in the same period of 2024[17] - The company’s long-lived asset expenditures for the nine months ended September 30, 2025, totaled $500 million, compared to $299 million in 2024, reflecting a substantial increase of 67.2%[160] Restructuring and Expenses - The company reported a restructuring expense of $23 million in Q3 2025, compared to $21 million in Q3 2024[13] - Cumulatively, the company has incurred $42 million in restructuring charges related to the 2024 Structural Cost Plan as of September 30, 2025[49] - The company recorded $34 million in restructuring costs for the nine months ended September 30, 2025, compared to $52 million in the same period of 2024[51] - Employee termination benefits accounted for $19 million of the restructuring costs in Q3 2025[53] - The company continues to evaluate options to reduce structural costs, indicating potential future restructuring expenses[60] Research and Development - Gross R&D expenditures for the three months ended September 30, 2025, were $206 million, a decrease of 5.5% from $218 million in 2024; for the nine months, expenditures were $609 million, down 7.2% from $656 million in 2024[64] - Net R&D expenditures for the three months ended September 30, 2025, were $189 million, slightly down from $190 million in 2024; for the nine months, net expenditures were $553 million, a decrease of 2.3% from $566 million in 2024[64] Segment Performance - Revenue from Foundational products for the three months ended September 30, 2025, was $2,985 million, compared to $2,810 million in 2024, representing a growth of 6.2%[43] - The Company’s net sales for the PowerDrive Systems segment were $582 million for the three months ended September 30, 2025, compared to $576 million in the same period of 2024, reflecting a growth of 1.0%[153] - Net sales for the Turbos & Thermal Technologies segment increased by $51 million, or 4%, to $1,437 million for the three months ended September 30, 2025, with an adjusted operating income of $219 million and a margin of 15.2%[207][209] - The Drivetrain & Morse Systems segment's net sales rose by $87 million, or 6%, to $1,452 million for the three months ended September 30, 2025, with an adjusted operating income of $267 million and a margin of 18.4%[207][210] - PowerDrive Systems segment reported net sales of $582 million with an adjusted operating loss of $(35) million, reflecting a margin of (6.0)% for the three months ended September 30, 2025[207] Legal and Compliance - The company is involved in a lawsuit seeking to recover approximately $120 million in VAT refunds from PHINIA, which may impact future financial results[139] - The Company expects to receive approximately $52 million in VAT refunds as of September 30, 2025, after the Settlement Agreement with PHINIA[140] Taxation - The effective tax rate for the three months ended September 30, 2025, was 30%, significantly higher than 5% in 2024; for the nine months, the effective tax rate was 25% compared to 5% in 2024[75][76] - The provision for income taxes for the nine months ended September 30, 2025, was $188 million, resulting in an effective rate of 25%, compared to $44 million and 5% in 2024[203] Other Comprehensive Income - The company recognized a total of $973 million in other comprehensive income for the nine months ended September 30, 2025, compared to $20 million in the same period of 2024[122] - The accumulated other comprehensive loss decreased from $868 million as of June 30, 2025, to $838 million by September 30, 2025, showing an improvement of about 3.46%[135]

Core Insights - BorgWarner reported revenue of $3.59 billion for Q3 2025, reflecting a 4.1% increase year-over-year, but fell short of the Zacks Consensus Estimate by 1.07% [1] - The company's EPS for the quarter was $1.24, up from $1.09 in the same quarter last year, exceeding the consensus estimate of $1.16 by 6.9% [1] Financial Performance Metrics - Organic Net Sales Change was 2.1%, below the estimated 3.3% by analysts [4] - Net Sales for Turbos & Thermal Technologies reached $1.44 billion, slightly above the average estimate of $1.41 billion [4] - Net Sales for Drivetrain & Morse Systems was $1.45 billion, exceeding the average estimate of $1.39 billion [4] - Net Sales for Battery & Charging Systems was $132 million, significantly below the average estimate of $182.31 million [4] - Net Sales for PowerDrive Systems was $582 million, also below the average estimate of $644.41 million [4] - Adjusted Operating Income for Turbos & Thermal Technologies was $219 million, above the average estimate of $211.44 million [4] - Adjusted Operating Income for Battery & Charging Systems was a loss of $7 million, worse than the average estimate of a loss of $0.71 million [4] - Adjusted Operating Income for PowerDrive Systems was a loss of $35 million, compared to the average estimate of a loss of $21.94 million [4] - Adjusted Operating Income for Drivetrain & Morse Systems was $267 million, slightly above the average estimate of $261.55 million [4] Stock Performance - BorgWarner's shares have returned -3.2% over the past month, contrasting with the Zacks S&P 500 composite's increase of +3.6% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market [3]

Financial Data and Key Metrics Changes - The company reported sales of just under $3.6 billion for Q3 2025, reflecting a 2% year-over-year increase excluding foreign exchange impacts [15][21] - Adjusted operating margin was strong at 10.7%, a 60 basis point improvement year-over-year despite a $17 million net tariff headwind [15][17] - Free cash flow for the quarter was $266 million, a 32% increase from the previous year [15][21] Business Line Data and Key Metrics Changes - Organic sales growth was just over 2%, with a 4% increase in foundational sales, while the CV battery and charging system segment saw a decline [6][15] - Light vehicle eProduct sales increased by 6%, contributing to overall organic sales growth [16] - PowerDrive Systems (PDS) sales grew by 12% year-over-year, driven by growth in China [29] Market Data and Key Metrics Changes - The company expects a full-year sales benefit of $170 million due to the strengthening of the Euro against the U.S. Dollar [19] - The full-year market production outlook has improved to flat to down 1% year-over-year, compared to previous guidance of down 0.5% to down 2.5% [19] Company Strategy and Development Direction - The company aims to drive strong financial performance by launching profitable businesses globally and managing overall cost structures [12][13] - Focus on securing new business across the portfolio to contribute to long-term growth [13] - The company is committed to a balanced capital allocation approach that rewards shareholders while making inorganic investments [13][57] Management's Comments on Operating Environment and Future Outlook - Management acknowledged headwinds from a cyber-related shutdown at a European customer and supply constraints affecting production [15][68] - The company expects adjusted EPS in the range of $4.60 to $4.75 per diluted share, representing an 8% increase year-over-year at the midpoint [21] - Management remains optimistic about the long-term outlook for the battery business despite current sales headwinds [46] Other Important Information - The company returned approximately $136 million to shareholders in Q3, representing over 50% of free cash flow [8][22] - The company secured multiple new business awards across its portfolio, indicating strong demand for its products [12][14] Q&A Session Summary Question: Visibility on Q4 impact from Oswego - Management indicated a $50 to $100 million impact expected in Q4 due to the North American program [26] Question: Divisional margins, particularly PowerDrive Systems - PowerDrive Systems sales were over $580 million, with expectations for mid-teens incrementals as growth continues [29] Question: Unusual items in Q3 margin - No unusual one-time items were reported; strong performance attributed to cost controls and higher sales [36] Question: Battery and charging sales outlook - Management expects the battery business to be slightly EBITDA and free cash flow positive in 2025, despite current challenges [46] Question: Nexperia chip situation - The company has direct exposure to Nexperia and is managing the situation to mitigate impacts on customers [96] Question: Class 8 trucking market outlook - The Class 8 trucking market has been soft, but the company does not expect significant noise by year-end [98] Question: Capital allocation and share repurchases - The company plans to return $135 million in Q4, maintaining a balance between share repurchases and potential organic investments [81]

Group 1 - The article does not provide any relevant content regarding company or industry insights [1]

Q3 2025 Financial Performance - Net sales increased to $3591 million from $3449 million in Q3 2024[11] - Organic sales increased by approximately 2.1%[11, 33] - Adjusted EPS increased by approximately 14% from $1.09 to $1.24[11] - Free cash flow improved by approximately 32% from $201 million to $266 million[11] - Adjusted operating margin increased from 10.1% to 10.7%[11, 35] 2025 Outlook - Full-year net sales outlook is $14300 million[38] - Adjusted operating margin is expected to be between 10.3% and 10.5%[38, 39] - Adjusted diluted EPS is projected to be between $4.60 and $4.75[39] - Free cash flow is expected to be between $850 million and $950 million[39] - Organic growth is forecasted to be between -1% and 0%[39]

Group 1: Borg Warner and Autonomous Vehicles - Borg Warner has secured its first North American contract to supply battery technology for autonomous vehicles, specifically providing its NMC 157 cylindrical cell battery system for the fully electric level 4 Holan urban shuttle [1] Group 2: Plug Power and Electrolyzer Agreements - Plug Power has signed a binding agreement to supply up to 2 gigawatts of its Gen Eco electrolyzers to Allied Bofuels for a major sustainable aviation fuel and green diesel project [2] - Combined with an earlier 3 gigawatt deal with Allied Green Ammonia in Australia, Plug Power now has a total of 5 gigawatts of contracted capacity with allied partners, marking one of 2025's largest electrolyzer supply agreements [2] Group 3: Clean Energy Fuels and Renewable Natural Gas - Clean Energy Fuels has announced new nationwide agreements to expand the use of renewable natural gas and bulk liquefied natural gas, including partnerships with several space companies [3] - The agreements cover fuel supply, operations, and infrastructure development, highlighting the growing demand for cost-effective, low-emission solutions across transportation sectors [3] Group 4: Aduro Clean Technologies and Pilot Plant - Aduro Clean Technologies has provided an update on its next-generation process pilot plant, which is a major milestone in advancing its hydrochimmolytic technology [4] - The pilot will validate continuous operations across various feedstocks, generate key performance and environmental data, and support design planning for Aduro's upcoming 8,000 ton per year recycling plant [4]

Core Insights - BorgWarner reported quarterly earnings of $1.24 per share, exceeding the Zacks Consensus Estimate of $1.16 per share, and showing an increase from $1.09 per share a year ago, resulting in an earnings surprise of +6.90% [1] - The company posted revenues of $3.59 billion for the quarter ended September 2025, which was 1.07% below the Zacks Consensus Estimate, but an increase from $3.45 billion year-over-year [2] - BorgWarner's stock has increased by approximately 34.7% since the beginning of the year, outperforming the S&P 500's gain of 17.2% [3] Earnings Outlook - The future performance of BorgWarner's stock will largely depend on management's commentary during the earnings call and the company's earnings outlook [4] - The current consensus EPS estimate for the upcoming quarter is $1.11 on revenues of $3.51 billion, and for the current fiscal year, it is $4.58 on revenues of $14.3 billion [7] Industry Context - The Automotive - Original Equipment industry, to which BorgWarner belongs, is currently ranked in the top 30% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - The correlation between near-term stock movements and earnings estimate revisions suggests that tracking these revisions can provide insights into stock performance [5]

Financial Performance - BorgWarner's U.S. GAAP net sales for Q3 2025 were $3,591 million, representing a year-over-year increase of approximately 4.1% compared to Q3 2024[10]. - Adjusted net earnings per diluted share for Q3 2025 were $1.24, an increase of 14% from $1.09 in Q3 2024[12]. - BorgWarner's U.S. GAAP operating margin for Q3 2025 was 6.9%, with an adjusted operating margin of 10.7%, reflecting a 60 basis point improvement year-over-year[6]. - Net sales for Q3 2025 reached $3,591 million, a 4.1% increase from $3,449 million in Q3 2024[20]. - Gross profit for Q3 2025 was $664 million, with a gross margin of 18.5%, compared to $636 million and 18.4% in Q3 2024[20]. - Operating income for Q3 2025 decreased to $248 million from $270 million in Q3 2024[20]. - Net earnings attributable to BorgWarner Inc. for Q3 2025 were $158 million, down from $234 million in Q3 2024[20]. - Adjusted operating income for Q3 2025 was $385 million, with an adjusted operating margin of 10.7%, compared to $350 million and 10.1% in Q3 2024[33]. - The adjusted operating margin for the first nine months of 2025 was 10.3%, compared to 10.0% in the same period of 2024[33]. Cash Flow and Shareholder Returns - The company returned $136 million to stockholders in Q3 2025, including approximately $100 million in share repurchases and a $36 million cash dividend[6]. - Free cash flow for Q3 2025 was $266 million, an increase from $201 million in Q3 2024, with year-to-date free cash flow reaching $738 million compared to $190 million in the same period last year[35]. - Free cash flow for 2025 is expected to be in the range of $850 million to $950 million, reflecting a $150 million increase from prior guidance[14]. - The company anticipates free cash flow for full-year 2025 to be between $850 million and $950 million, with net cash provided by operating activities projected at $1,434 million to $1,484 million[40]. Guidance and Projections - Full-year 2025 net sales guidance is now projected to be between $14.1 billion and $14.3 billion, compared to approximately $14.1 billion in 2024[13]. - The company expects its U.S. GAAP operating margin for 2025 to be in the range of 7.8% to 7.9%, with an adjusted operating margin of 10.3% to 10.5%[14]. - The company anticipates a year-over-year change in organic sales for 2025 to be down 1% to approximately flat, in line with estimated market production[13]. - Full-year 2025 net sales guidance is projected between $14,100 million and $14,300 million, with an operating income guidance of $1,104 million to $1,134 million[38]. - Adjusted earnings per diluted share for full-year 2025 is expected to be between $3.52 and $3.63, reflecting various non-comparable items[39]. - Year-to-date organic net sales change for 2025 shows a slight increase of 0.4%, totaling $10,744 million compared to $10,647 million in 2024[37]. Business Developments - BorgWarner secured multiple new business awards, including contracts for all-wheel drive systems and turbocharger technology, with production expected to begin in 2026 and 2027[6]. - The company expects a year-over-year production change in light vehicles in North America to decline by 3% to 1.5%[42]. Assets and Liabilities - Total assets increased to $14,496 million as of September 30, 2025, up from $13,993 million at the end of 2024[22]. - Total liabilities stood at $8,346 million as of September 30, 2025, compared to $8,287 million at the end of 2024[22]. Restructuring Expenses - The company reported a restructuring expense of $23 million for Q3 2025, slightly up from $21 million in Q3 2024[21]. - The company reported a restructuring expense of $71 million for the first nine months of 2025, up from $65 million in the same period last year[33]. Segment Performance - The PowerDrive Systems segment reported a net sales increase to $582 million in Q3 2025, up from $512 million in Q3 2024[21]. - Organic net sales for Q3 2025 increased by 2.1% year-over-year, totaling $3,591 million, with notable growth in PowerDrive Systems at 11.9%[36]. Operating Activities - Net cash provided by operating activities for Q3 2025 was $368 million, with free cash flow of $266 million[10]. - Cash provided by operating activities from continuing operations for the nine months ended September 30, 2025, was $1,029 million, compared to $700 million in the same period of 2024[24]. Earnings Per Share - The company’s diluted earnings per share from continuing operations for Q3 2025 was $0.73, down from $1.08 in Q3 2024[20].

Core Insights - BorgWarner has secured multiple contracts with Chery to supply advanced All-Wheel Drive (AWD) technologies, including the torque-on-demand transfer case with mechanical lock (Mlock TOD) and Gen VI Cross Wheel Drive (XWD) system, with mass production set to begin in 2027 [1][2][8] Group 1: Product Details - The Mlock TOD transfer case will be featured in Chery's pickup trucks, enhancing efficiency under high-speed conditions and supporting both 2-Wheel-Drive High Range (2H) and AUTO modes for improved fuel efficiency [3][8] - The Gen VI XWD system will be supplied for Chery's SUV models, incorporating a modular piston pump, brushless DC motor, and integrated controller to reduce weight and cost while improving efficiency and vehicle stability [4][8] Group 2: Strategic Implications - This collaboration aims to leverage BorgWarner's extensive product portfolio and technical expertise to support Chery's growth in both domestic and international markets [2][8]