BorgWarner Reports Strong First Quarter 2025 Results; Announces Exit of Charging Business; Secures New Business Across Portfolio to Support Future Growth

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]