Core Insights - BorgWarner reported adjusted earnings of $1.21 per share for Q2 2025, exceeding the Zacks Consensus Estimate of $1.06 and increasing from $1.19 in the prior-year quarter [1] - The company achieved net sales of $3.64 billion, a 1% year-over-year increase, surpassing the Zacks Consensus Estimate of $3.55 billion [1] Segmental Performance - **Turbos & Thermal Technologies**: Net sales were $1.48 billion, down from $1.5 billion year-over-year, but above the Zacks Consensus Estimate of $1.47 billion. Adjusted operating income rose to $227 million from $224 million, exceeding the estimate of $218 million [2] - **Drivetrain & Morse Systems**: Net sales totaled $1.43 billion, slightly down from $1.44 billion year-over-year, yet above the Zacks Consensus Estimate of $1.41 billion. Adjusted operating income decreased to $260 million from $266 million but surpassed the estimate of $257 million [3] - **PowerDrive Systems**: Sales increased by 25% year-over-year to $581 million, exceeding the Zacks Consensus Estimate of $464 million. The segment reported an adjusted operating loss of $33 million, improved from a loss of $49 million in the same period of 2024 [4] - **Battery & Charging Systems**: Sales were $159 million, down from $193 million year-over-year, missing the Zacks Consensus Estimate of $217 million. The segment incurred an adjusted operating loss of $12 million, wider than the $10 million loss in the previous year but narrower than the estimate of a $17.17 million loss [5] Financial Overview - As of June 30, 2025, BorgWarner had $2 billion in cash and equivalents, down from $2.09 billion at the end of 2024. Long-term debt increased to $3.9 billion from $3.76 billion [6] - Net cash provided by operating activities was $579 million, with capital expenditures totaling $77 million and free cash flow at $507 million [6] Dividend and Buyback - The company declared a quarterly cash dividend of 17 cents per share, a 55% increase from the previous payout, to be paid on September 15, 2025 [7] - BorgWarner also increased its buyback authorization to $1 billion [7] 2025 Guidance - BorgWarner raised its full-year 2025 net sales guidance to a range of $14-$14.4 billion, up from $13.6-$14.2 billion. Adjusted operating margin is now expected to be between 10.1-10.3%, an increase from the previous guidance of 9.6-10.2% [8] - Adjusted earnings per share are now estimated to be in the range of $4.45-$4.65, up from $4-$4.45. Operating cash flow is projected between $1,368-$1,418 million, and free cash flow is expected to be $700-$800 million, an increase from the previous forecast of $650-$750 million [10]

Core Insights - BorgWarner reported $3.64 billion in revenue for Q2 2025, a year-over-year increase of 1% and exceeding the Zacks Consensus Estimate of $3.56 billion by 2.31% [1] - The company achieved an EPS of $1.21, up from $1.19 a year ago, and surpassed the consensus EPS estimate of $1.06 by 14.15% [1] Financial Performance Metrics - Organic Net Sales Change was -0.9%, compared to an estimated 0.1% by analysts [4] - Net Sales for Turbos & Thermal Technologies reached $1.48 billion, matching the three-analyst average estimate [4] - Net Sales for Drivetrain & Morse Systems was $1.43 billion, slightly above the $1.41 billion average estimate [4] - Net Sales for Battery & Charging Systems was $159 million, significantly below the estimated $216.69 million [4] - Net Sales for PowerDrive Systems was $581 million, exceeding the average estimate of $463.7 million [4] - Adjusted Operating Income for Turbos & Thermal Technologies was $227 million, above the estimated $217.94 million [4] - Adjusted Operating Income for Battery & Charging Systems was a loss of $12 million, better than the estimated loss of $17.17 million [4] - Adjusted Operating Income for PowerDrive Systems was a loss of $33 million, in line with the average estimate of $-33.02 million [4] - Adjusted Operating Income for Drivetrain & Morse Systems was $260 million, slightly above the average estimate of $256.55 million [4] Stock Performance - BorgWarner's shares have returned -2.8% over the past month, contrasting with the Zacks S&P 500 composite's +2.7% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market [3]

Company Overview & Strategy - BorgWarner's vision is a clean, energy-efficient world, and its mission is to deliver 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's value proposition includes a strong product portfolio, leading market share, financial strength, customer relationships, and a decentralized operating model[19] Financial Performance & Outlook - The company's 2024 foundational sales were approximately $12 billion[26] - BorgWarner estimates an adjusted operating margin between 96% and 102% for 2025[58, 59] - The company anticipates free cash flow between $650 million and $750 million in 2025[59] Market Dynamics & Opportunities - The estimated BorgWarner weighted light vehicle/commercial vehicle market is expected to decrease by 2% to 4% in 2025[62, 63] - The content opportunity per light vehicle increases from $548 for combustion engines to $2,569 for battery electric vehicles (BEVs) in 2027[24] - BorgWarner is exiting the charging business, which is expected to increase adjusted operating income by approximately $15 million in 2025 and $30 million in 2026[43] Capital Allocation - From 2020-2024, BorgWarner allocated capital with 57% towards M&A, 21% towards buybacks, 14% towards dividends and 8% towards Non-Controlling Interest Dividends, totaling $49 billion[53] - Since 2020, BorgWarner has returned approximately $35 billion to shareholders, including $1033 billion in buybacks, $720 million in shareholder dividends, and ~$17 billion market cap of PHINIA at spin-off[53]

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]