BorgWarner(US:BWA)2025-10-30 15:36Financial 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]