BorgWarner Reports 2025 Results and Provides 2026 Guidance; Returned Approximately $630 Million to Shareholders in 2025; Strategically Enters Data Center Market with Turbine Generator System Award

Core Insights - BorgWarner reported strong financial results for 2025, with adjusted net earnings per diluted share increasing by approximately 14% to $4.91 compared to 2024, driven by higher operating income and share repurchases [1][2] - The company strategically entered the data center market with a turbine generator system, expected to generate over $300 million in sales during its first year of production starting in early 2027 [1][2] - For 2026, BorgWarner anticipates a slight decline in net sales, projecting between $14.0 billion and $14.3 billion, while expecting adjusted operating margin improvement [2][5] Full Year 2025 Highlights - BorgWarner secured a record number of light vehicle awards, which are expected to enhance profitable growth in 2027 and beyond [1] - U.S. GAAP net earnings per diluted share were $1.28, with adjusted net earnings at $4.91 [1][2] - Operating cash flow increased to $1,648 million, a 19% rise compared to 2024, while free cash flow surged by approximately 66% to $1,208 million [1][2] - Light vehicle eProducts grew by approximately 23% in 2025, reflecting strong demand for hybrid and electric technologies [1][2] New Business Awards - BorgWarner received a master supply agreement for a turbine generator system aimed at the AI-driven data center market [1] - Additional awards include an electric cross differential with a leading Chinese OEM, a battery management system for global OEMs, and integrated drive modules for various vehicle architectures [1][2] Fourth Quarter Highlights - U.S. GAAP net sales for Q4 2025 were $3,572 million, a 3.9% increase from Q4 2024 [2][4] - The company reported a net loss of $(1.23) per diluted share for Q4 2025, compared to a loss of $(1.84) in Q4 2024 [2][4] - Adjusted net earnings for Q4 2025 were $1.35 per diluted share, up approximately 34% from $1.01 in Q4 2024 [2][4] 2026 Guidance - BorgWarner expects net sales in the range of $14.0 billion to $14.3 billion for 2026, reflecting a year-over-year organic sales decline of approximately 3.5% to 1.5% [2][5] - The company anticipates an adjusted operating margin between 10.7% and 10.9% for 2026, with net earnings per diluted share projected between $4.74 and $4.91 [2][5] - Full-year operating cash flow is expected to be between $1,600 million and $1,700 million, while free cash flow is projected to range from $900 million to $1,100 million [2][5]