BorgWarner Reports Strong Second Quarter 2026 Results, Increases 2026 Adjusted EPS Guidance and Share Repurchase Authorization By $1 Billion, And Announces 7 Awards Across Portfolio to Support Long-Term Profitable Growth
Rhea-AI Summary
BorgWarner (NYSE: BWA) reported Q2 2026 net sales of $3.65 billion, up 0.3% year-over-year, while organic net sales declined 1.2%, mainly from lower Battery Energy Systems sales. GAAP operating margin improved to 10.1% and adjusted operating margin to 11.3%. GAAP EPS was $1.34 and adjusted EPS rose 17.4% to $1.42 per diluted share.
Free cash flow in Q2 was $492 million. BorgWarner repurchased about $100 million of stock and paid $34 million in dividends, and its board increased share repurchase authorization by $1 billion to approximately $1.35 billion through 2029. For 2026, the company maintained sales and margin guidance but raised adjusted EPS guidance to $5.05–$5.30 from $5.00–$5.20, with expected net sales of $14.0–$14.3 billion versus $14.3 billion in 2025 and free cash flow of $900 million–$1.1 billion.
Positive
- Adjusted EPS growth to $1.42, up 17.4% year-over-year
- GAAP operating margin 10.1%, expanding 220 basis points year-over-year
- Free cash flow $492 million generated in Q2 2026
- Share repurchase authorization increased by $1.0 billion to about $1.35 billion
- 2026 adjusted EPS guidance raised to $5.05–$5.30 per diluted share
Negative
- Organic net sales declined 1.2% year-over-year in Q2 2026
- Battery Energy Systems sales fell to $100 million from $159 million
- 2026 organic net sales guidance down 3.5% to 1.5% year-over-year
- Battery Energy Systems 2026 sales expected to decline about $250 million
- PowerDrive Systems segment posted $29 million adjusted operating loss in Q2 2026
News Explained
Seven secured programs target production beginning in late 2026 through 2029, extending the disclosure beyond current-quarter results.
For existing common holders, the company says its completed second-quarter repurchases lowered the share count and helped adjusted earnings per share; the additional
Separately, seven secured business awards are at the award stage, with production expected to start from
Market Reaction – BWA
Following this news, BWA has gained 8.02%, reflecting a notable positive market reaction. Our momentum scanner has triggered 10 alerts so far, indicating notable trading interest and price volatility. The stock is currently trading at $68.09.
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Key Figures
Previous Buybacks,earnings Reports
| Date | Event | Sentiment | 24h Move | Catalyst |
|---|---|---|---|---|
| Oct 31 | earnings and buybacks | Positive | +0.2% | Raised margin and EPS guidance while completing a $400 million share repurchase plan |
24h Move is the share-price change in the day after each event; other market factors may also have contributed.
The tag-specific prior earnings-and-buybacks event had a positive 0.24% 24-hour reaction.
Key Terms
u.s. gaap financial
organic net sales financial
adjusted operating margin financial
free cash flow financial
AI-generated analysis. How Rhea-AI works. Not financial advice.
Second Quarter Results and Business Update
- BorgWarner's (the "Company")
U.S . GAAP net sales increased approximately0.3% , while organic net sales decreased approximately1.2% , year-over-year compared with the second quarter of 2025. Excluding the decline in Battery Energy Systems segment sales of approximately$60 million - The Company achieved a
U.S . GAAP operating margin of10.1% during the second quarter of 2026, or an increase of 220 basis points, compared with the second quarter of 2025. The Company achieved an adjusted operating margin of11.3% , or an increase of 100 basis points, compared with the second quarter of 2025. The Company's continued focus on cost controls allowed it to deliver strong performance despite a lower industry production environment. - The Company repurchased approximately
$100 million $34 million - The Company's Board of Directors authorized an increase to its share repurchase program of
$1 billion $1.35 billion - The Company continued to make progress in its product readiness across its portfolio offerings for the data center and industrial markets. The Company plans to increase 2026 R&D spending to accelerate these future growth opportunities.
New Business Awards Across Portfolio
The Company secured multiple new business awards that are expected to support its long-term profitable growth, including the following:
- New eTurbo award with a major European OEM for an advanced hybrid passenger car application. Production is expected to begin in 2029.
- Torque-on-demand with mechanical lock transfer case award with a Chinese OEM for a newly developed, full-size SUV. Production is expected to begin in the fourth quarter of 2026.
- Two variable cam timing awards. These include a conquest award with a major Chinese OEM and a program life extension award with a leading European premium OEM. Production is expected to begin in 2026 and 2027, respectively.
- Integrated Drive Modules (iDM) award with a global OEM. This program utilizes the Company's next-generation iDM technology, setting a new benchmark in performance, efficiency and system integration. Production is expected to begin in 2027.
- Two high-volume inverter extension awards with a major European OEM for plug-in hybrid and 800V battery-electric vehicles. Production is expected to begin in 2029.
Second Quarter Highlights:
U.S . GAAP net sales of$3,648 million 0.3% compared with the second quarter of 2025.- Excluding the impact of foreign currencies, organic net sales decreased
1.2% compared with the second quarter of 2025.
- Excluding the impact of foreign currencies, organic net sales decreased
U.S . GAAP net earnings of$1.34 - Excluding
$0.08 $1.42 17.4% compared with the second quarter of 2025.
- Excluding
U.S . GAAP operating income of$370 million 10.1% of net sales.- Excluding
$43 million $413 million 11.3% of net sales.
- Excluding
- Net cash provided by operating activities of
$586 million - Free cash flow of
$492 million
- Free cash flow of
Financial Results:
The Company believes the following table is useful in highlighting non-comparable items that impacted its
Three Months Ended June 30, | Six Months Ended June 30, | ||||||
2026 | 2025 | 2026 | 2025 | ||||
Earnings per diluted share | $ 1.34 | $ 1.03 | $ 2.50 | $ 1.75 | |||
Non-comparable items: | |||||||
Restructuring expense | 0.07 | 0.06 | 0.13 | 0.17 | |||
Accelerated depreciation | 0.03 | 0.08 | 0.03 | 0.08 | |||
Adjustments associated with Spin-Off related balances | — | 0.01 | 0.01 | (0.01) | |||
Impairment charges | — | 0.01 | — | 0.16 | |||
Write-off of customer incentive asset | — | 0.03 | — | 0.03 | |||
Costs to exit charging business | — | 0.02 | — | 0.13 | |||
Chief Executive Officer ("CEO") transition compensation | — | 0.03 | — | 0.03 | |||
Loss on sale of assets | — | 0.02 | — | 0.02 | |||
Merger and acquisition expense, net | — | — | (0.01) | 0.01 | |||
Unrealized gain on equity securities | (0.02) | — | (0.01) | — | |||
Tax adjustments | (0.01) | (0.08) | — | (0.06) | |||
Other non-comparable items | 0.01 | — | 0.01 | 0.01 | |||
Adjusted earnings per diluted share | $ 1.42 | $ 1.21 | $ 2.66 | $ 2.32 | |||
Net sales were
Full Year 2026 Guidance Update: The Company increased its 2026 full year adjusted earnings per share guidance, while maintaining its sales, adjusted operating margin and cash flow expectations.
At the mid-point of its 2026 guidance, the Company expects to deliver another year of adjusted operating margin improvement and adjusted earnings per share growth despite the Company's expectation that its weighted light vehicle markets will be down
At 9:30 a.m. ET today, a brief conference call concerning second quarter 2026 results and full year guidance will be webcast at: https://www.borgwarner.com/investors. Additionally, an earnings call presentation will be available at https://www.borgwarner.com/investors.
For more than 130 years, BorgWarner has been a transformative global product leader bringing successful mobility innovation to market. With a focus on sustainability, we're helping to build a cleaner, healthier, safer future for all.
Forward Looking Statements: This release may contain forward-looking statements as contemplated by the 1995 Private Securities Litigation Reform Act that are based on management's current outlook, expectations, estimates and projections. Words such as "anticipates," "believes," "continues," "could," "designed," "effect," "estimates," "evaluates," "expects," "forecasts," "goal," "guidance," "initiative," "intends," "may," "outlook," "plans," "potential," "predicts," "project," "pursue," "seek," "should," "target," "when," "will," "would," and variations of such words and similar expressions are intended to identify such forward-looking statements. Further, all statements, other than statements of historical fact, contained or incorporated by reference in this release that we expect or anticipate will or may occur in the future regarding our financial position, including our guidance for full year 2026, our business strategy and measures to implement that strategy, including changes to operations, competitive strengths, goals, expansion and profitable growth of our business and operations, plans, references to future success, including the anticipated benefits of increased investments in research and development, our new business awards and other such matters, are forward-looking statements. Accounting estimates, such as those described under the heading "Critical Accounting Policies and Estimates" in Item 7 of our most recently filed Annual Report on Form 10-K ("Form 10-K"), are inherently forward-looking. All forward-looking statements are based on assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate under the circumstances. Forward-looking statements are not guarantees of performance, and the Company's actual results may differ materially from those expressed, projected or implied in or by the forward-looking statements.
You should not place undue reliance on these forward-looking statements, which speak only as of the date of this release. Forward-looking statements are subject to risks and uncertainties, many of which are difficult to predict and generally beyond our control, that could cause actual results to differ materially from those expressed, projected or implied in or by the forward-looking statements. These risks and uncertainties, among others, include: the success of our portfolio strategy; supply disruptions impacting us or our customers, commodity availability and pricing and an inability to achieve expected levels of recoverability in commercial negotiations with customers concerning these costs; conditions in the automotive industry; competitive challenges from existing and new competitors, including original equipment manufacturer ("OEM") customers; the challenges associated with rapidly changing technologies, including artificial intelligence, and our ability to innovate in response; the difficulty in forecasting demand for electric vehicles and our electric vehicles revenue growth; potential future changes in laws and regulations, including, by way of example, taxes and tariffs, in the countries in which we operate; potential disruptions in the global economy caused by wars or other geopolitical conflicts; the ability to identify targets and consummate acquisitions on acceptable terms; failure to realize the expected benefits of acquisitions on a timely basis; the possibility that our 2023 tax-free spin-off of our former Fuel Systems and Aftermarket segments into a separate publicly traded company will not achieve its intended tax benefits; the failure to promptly and effectively integrate acquired businesses; the potential for unknown or inestimable liabilities relating to the acquired businesses; impacts of our exit of the charging business; our dependence on automotive and truck production, which is highly cyclical and subject to disruptions; our reliance on major OEM customers; impacts of any future strikes involving any of our OEM customers and any actions such OEM customers take in response; fluctuations in interest rates and foreign currency exchange rates; our dependence on information systems; the uncertainty of the global economic environment; the uncertainty surrounding global trade policies, including tariffs (and any potential refund recovery of tariffs imposed under the International Emergency Economic Powers Act) and export restrictions and their impact on the Company, its customers and its suppliers; the outcome of existing or any future legal proceedings, including litigation with respect to various claims, or governmental investigations, including related litigation; impacts from any potential future acquisition or disposition transactions; and the other risks discussed in reports that we file with the Securities and Exchange Commission, including in Item 1A. "Risk Factors" in our most recently filed Form 10-K and/or Quarterly Report on Form 10-Q. We do not undertake any obligation to update or announce publicly any updates to or revisions to any of the forward-looking statements in this release to reflect any change in our expectations or any change in events, conditions, circumstances, or assumptions underlying the statements.
BorgWarner Inc. | |||||||
Condensed Consolidated Statements of Operations (Unaudited) | |||||||
(in millions, except per share amounts) | |||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||
2026 | 2025 | 2026 | 2025 | ||||
Net sales | $ 3,648 | $ 3,638 | $ 7,181 | $ 7,153 | |||
Cost of sales | 2,927 | 2,998 | 5,783 | 5,874 | |||
Gross profit | 721 | 640 | 1,398 | 1,279 | |||
Gross margin | 19.8 % | 17.6 % | 19.5 % | 17.9 % | |||
Selling, general and administrative expenses | 331 | 317 | 659 | 632 | |||
Restructuring expense | 21 | 17 | 39 | 48 | |||
Other operating (income) expense, net | (1) | 14 | (6) | 31 | |||
Impairment charges | — | 3 | — | 42 | |||
Operating income | 370 | 289 | 706 | 526 | |||
Equity in affiliates' earnings, net of tax | (10) | (8) | (16) | (18) | |||
Unrealized gain on equity securities | (4) | (1) | (3) | (1) | |||
Interest expense, net | 10 | 12 | 21 | 24 | |||
Other postretirement expense | 2 | 2 | 4 | 5 | |||
Earnings before income taxes and noncontrolling interest | 372 | 284 | 700 | 516 | |||
Provision for income taxes | 81 | 52 | 154 | 113 | |||
Net earnings | 291 | 232 | 546 | 403 | |||
Net earnings attributable to noncontrolling interest | 14 | 8 | 27 | 22 | |||
Net earnings attributable to BorgWarner Inc. | $ 277 | $ 224 | $ 519 | $ 381 | |||
Earnings per share attributable to BorgWarner Inc. — diluted | $ 1.34 | $ 1.03 | $ 2.50 | $ 1.75 | |||
Weighted average shares outstanding: | |||||||
Basic | 203.0 | 216.3 | 204.2 | 216.7 | |||
Diluted | 206.3 | 218.2 | 207.3 | 218.1 | |||
BorgWarner Inc. | |||||||
Net Sales by Reportable Segment (Unaudited) | |||||||
(in millions) | |||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||
2026 | 2025 | 2026 | 2025 | ||||
Turbos & Thermal Technologies | $ 1,442 | $ 1,481 | $ 2,875 | $ 2,935 | |||
Drivetrain & Morse Systems | 1,455 | 1,429 | 2,877 | 2,790 | |||
PowerDrive Systems | 665 | 581 | 1,252 | 1,142 | |||
Battery Energy Systems | 100 | 159 | 202 | 309 | |||
Inter-segment eliminations | (14) | (12) | (25) | (23) | |||
Net sales | $ 3,648 | $ 3,638 | $ 7,181 | $ 7,153 | |||
Segment Adjusted Operating Income (Loss) (Unaudited) | |||||||
(in millions) | |||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||
2026 | 2025 | 2026 | 2025 | ||||
Turbos & Thermal Technologies | $ 225 | $ 227 | $ 439 | $ 462 | |||
Drivetrain & Morse Systems | 277 | 260 | 537 | 503 | |||
PowerDrive Systems | (29) | (33) | (65) | (76) | |||
Battery Energy Systems | (2) | (12) | (4) | (34) | |||
Segment Adjusted Operating Income | 471 | 442 | 907 | 855 | |||
Corporate, including stock-based compensation | 58 | 69 | 122 | 130 | |||
Restructuring expense | 21 | 17 | 39 | 48 | |||
Intangible asset amortization expense | 14 | 16 | 30 | 33 | |||
Accelerated depreciation | 7 | 21 | 9 | 21 | |||
Adjustments associated with Spin-Off related balances | (1) | 2 | 1 | (1) | |||
Impairment charges | — | 3 | — | 42 | |||
Write-off of customer incentive asset | — | 7 | — | 7 | |||
Costs to exit charging business | — | 6 | — | 32 | |||
Chief Executive Officer ("CEO") transition compensation | — | 6 | — | 6 | |||
Loss on sale of assets | — | 5 | — | 5 | |||
Loss on sale of businesses | — | — | — | 1 | |||
Merger and acquisition expense, net | — | — | (2) | 2 | |||
Other non-comparable items | 2 | 1 | 2 | 3 | |||
Equity in affiliates' earnings, net of tax | (10) | (8) | (16) | (18) | |||
Unrealized gain on equity securities | (4) | (1) | (3) | (1) | |||
Interest expense, net | 10 | 12 | 21 | 24 | |||
Other postretirement expense | 2 | 2 | 4 | 5 | |||
Earnings before income taxes and noncontrolling interest | $ 372 | $ 284 | $ 700 | $ 516 | |||
Provision for income taxes | 81 | 52 | 154 | 113 | |||
Net earnings | 291 | 232 | 546 | 403 | |||
Net earnings attributable to noncontrolling interest | 14 | 8 | 27 | 22 | |||
Net earnings attributable to BorgWarner Inc. | $ 277 | $ 224 | $ 519 | $ 381 | |||
BorgWarner Inc. | |||
Condensed Consolidated Balance Sheets (Unaudited) | |||
(in millions) | |||
June 30, | December 31, | ||
ASSETS | |||
Cash and cash equivalents | $ 2,448 | $ 2,313 | |
Receivables, net | 3,056 | 2,962 | |
Inventories | 1,232 | 1,207 | |
Prepayments and other current assets | 352 | 313 | |
Total current assets | 7,088 | 6,795 | |
Property, plant and equipment, net | 3,220 | 3,330 | |
Other non-current assets | 3,626 | 3,644 | |
Total assets | $ 13,934 | $ 13,769 | |
LIABILITIES AND EQUITY | |||
Short-term debt | $ 5 | $ 5 | |
Accounts payable | 2,138 | 1,996 | |
Other current liabilities | 1,190 | 1,281 | |
Total current liabilities | 3,333 | 3,282 | |
Long-term debt | 3,863 | 3,894 | |
Other non-current liabilities: | 940 | 979 | |
Total liabilities | 8,136 | 8,155 | |
Total BorgWarner Inc. stockholders' equity | 5,621 | 5,442 | |
Noncontrolling interest | 177 | 172 | |
Total equity | 5,798 | 5,614 | |
Total liabilities and equity | $ 13,934 | $ 13,769 | |
BorgWarner Inc. | |||
Condensed Consolidated Statements of Cash Flows (Unaudited) | |||
(in millions) | |||
Six Months Ended June 30, | |||
2026 | 2025 | ||
OPERATING ACTIVITIES | |||
Net cash provided by operating activities | $ 738 | $ 661 | |
INVESTING ACTIVITIES | |||
Capital expenditures, including tooling outlays | (239) | (196) | |
Customer advances related to capital expenditures | 6 | 7 | |
Proceeds from settlement of net investment hedges, net | 9 | 8 | |
Payments for investments in equity securities | (2) | — | |
Proceeds from the sale of business, net | — | 7 | |
Proceeds from asset disposals and other, net | 1 | 16 | |
Net cash used in investing activities | (225) | (158) | |
FINANCING ACTIVITIES | |||
Payments of notes payable | — | (5) | |
Repayments of debt, including current portion | (3) | (403) | |
Payments for purchase of treasury stock | (250) | (108) | |
Payments for excise tax on purchase of treasury stock | (5) | — | |
Payments for stock-based compensation items | (28) | (18) | |
Payment for business acquired, net of cash acquired | (3) | — | |
Payments for contingent consideration | — | (4) | |
Dividends paid to BorgWarner stockholders | (69) | (48) | |
Dividends paid to noncontrolling stockholders | (10) | (20) | |
Net cash used in financing activities | (368) | (606) | |
Effect of exchange rate changes on cash | (10) | 50 | |
Net increase (decrease) in cash and cash equivalents | 135 | (53) | |
Cash and cash equivalents at beginning of year | 2,313 | 2,094 | |
Cash, cash equivalents and restricted cash at end of period | $ 2,448 | $ 2,041 | |
Supplemental Information (Unaudited) | |||
(in millions) | |||
Six Months Ended June 30, | |||
2026 | 2025 | ||
Depreciation and tooling amortization | $ 264 | $ 301 | |
Intangible asset amortization | $ 30 | $ 33 | |
Non-GAAP Financial Measures
This press release contains information about the Company's financial results that is not presented in accordance with
Management believes that these non-GAAP financial measures are useful to management, investors and banking institutions in their analyses of the Company's business and operating performance. Management also uses this information for operational planning and decision-making purposes.
Non-GAAP financial measures are not and should not be considered a substitute for any
Adjusted Operating Income and Adjusted Operating Margin
The Company defines adjusted operating income as operating income adjusted to exclude the impact of restructuring expense, merger, acquisition and divestiture expense, intangible asset amortization expense, other net expenses, discontinued operations and other gains and losses not reflective of the Company's ongoing operations. Adjusted operating margin is defined as adjusted operating income divided by net sales.
Adjusted Net Earnings
The Company defines adjusted net earnings as net earnings attributable to the Company, adjusted to eliminate the impact of restructuring expense, merger, acquisition and divestiture expense, other net expenses, discontinued operations and other gains and losses not reflective of the Company's ongoing operations and related tax effects. The impact of intangible asset amortization expense continues to be included in adjusted net earnings.
Adjusted Earnings per Diluted Share
The Company defines adjusted earnings per diluted share as earnings per diluted share adjusted to eliminate the impact of restructuring expense, merger, acquisition and divestiture expense, other net expenses, discontinued operations and other gains and losses not reflective of the Company's ongoing operations and related tax effects. The impact of intangible asset amortization expense continues to be included in adjusted earnings per share.
Free Cash Flow
The Company defines free cash flow as net cash provided by operating activities minus capital expenditures, net of customer advances related to capital expenditures. The Company believes this measure is useful to both management and investors in evaluating the Company's ability to service and repay its debt.
Organic Net Sales Change
The Company defines organic net sales changes as net sales change year-over-year excluding the estimated impact of foreign exchange ("FX") and net mergers, acquisitions and divestitures.
Adjusted Operating Income and Adjusted Operating Margin (Unaudited) | |||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||
(in millions) | 2026 | 2025 | 2026 | 2025 | |||
Net sales | $ 3,648 | $ 3,638 | $ 7,181 | $ 7,153 | |||
Operating income | $ 370 | $ 289 | $ 706 | $ 526 | |||
Operating margin | 10.1 % | 7.9 % | 9.8 % | 7.4 % | |||
Non-comparable items: | |||||||
Restructuring expense | $ 21 | $ 17 | $ 39 | $ 48 | |||
Intangible asset amortization expense | 14 | 16 | 30 | 33 | |||
Accelerated depreciation | 7 | 21 | 9 | 21 | |||
Adjustments associated with Spin-Off related balances | (1) | 2 | 1 | (1) | |||
Impairment charges | — | 3 | — | 42 | |||
Costs to exit charging business | — | 6 | — | 32 | |||
Chief Executive Officer ("CEO") transition compensation | — | 6 | — | 6 | |||
Write-off of customer incentive asset | — | 7 | — | 7 | |||
Loss on sale of assets | — | 5 | — | 5 | |||
Loss on sale of businesses | — | — | — | 1 | |||
Merger and acquisition expense, net | — | — | (2) | 2 | |||
Other non-comparable items | 2 | 1 | 2 | 3 | |||
Adjusted operating income | $ 413 | $ 373 | $ 785 | $ 725 | |||
Adjusted operating margin | 11.3 % | 10.3 % | 10.9 % | 10.1 % | |||
Free Cash Flow Reconciliation (Unaudited) | |||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||
(in millions) | 2026 | 2025 | 2026 | 2025 | |||
Net cash provided by operating activities | $ 586 | $ 579 | $ 738 | $ 661 | |||
Capital expenditures, including tooling outlays | (96) | (77) | (239) | (196) | |||
Customer advances related to capital expenditures | 2 | 5 | 6 | 7 | |||
Free cash flow | $ 492 | $ 507 | $ 505 | $ 472 | |||
Second Quarter 2026 Organic Net Sales Change (Unaudited) | |||||||||
(in millions) | Q2 2025 | FX | Organic | Q2 2026 | Organic | ||||
Turbos & Thermal Technologies | $ 1,481 | $ 24 | $ (63) | $ 1,442 | (4.3) % | ||||
Drivetrain & Morse Systems | 1,429 | 11 | 15 | 1,455 | 1.0 % | ||||
PowerDrive Systems | 581 | 16 | 68 | 665 | 11.7 % | ||||
Battery Energy Systems | 159 | 3 | (62) | 100 | (39.0) % | ||||
Inter-segment eliminations | (12) | — | (2) | (14) | 16.7 % | ||||
Net sales | $ 3,638 | $ 54 | $ (44) | $ 3,648 | (1.2) % | ||||
Year to Date 2026 Organic Net Sales Change (Unaudited) | |||||||||
(in millions) | Q2 2025 | FX | Organic | Q2 2026 | Organic | ||||
Turbos & Thermal Technologies | $ 2,935 | $ 105 | $ (165) | $ 2,875 | (5.6) % | ||||
Drivetrain & Morse Systems | 2,790 | 60 | 27 | 2,877 | 1.0 % | ||||
PowerDrive Systems | 1,142 | 47 | 63 | 1,252 | 5.5 % | ||||
Battery Energy Systems | 309 | 9 | (116) | 202 | (37.5) % | ||||
Inter-segment eliminations | (23) | — | (2) | (25) | 8.7 % | ||||
Total | $ 7,153 | $ 221 | $ (193) | $ 7,181 | (2.7) % | ||||
Adjusted Operating Income and Adjusted Operating Margin Guidance Reconciliation (Unaudited) | |||
Full Year 2026 Guidance | |||
(in millions) | Low | High | |
Net sales | $ 14,000 | $ 14,300 | |
Operating income | $ 1,343 | $ 1,398 | |
Operating margin | 9.6 % | 9.8 % | |
Non-comparable items: | |||
Restructuring expense | $ 90 | $ 100 | |
Intangible asset amortization | 57 | 57 | |
Accelerated depreciation | 9 | 9 | |
Adjustment associated with Spin-Off related balances | 1 | 1 | |
Merger and acquisition expense, net | (2) | (2) | |
Other non-comparable items | 2 | 2 | |
Adjusted operating income | $ 1,500 | $ 1,565 | |
Adjusted operating margin | 10.7 % | 10.9 % | |
Adjusted Earnings Per Diluted Share Guidance Reconciliation (Unaudited) | |||
Full Year 2026 Guidance | |||
Low | High | ||
Earnings per Diluted Share | $ 4.72 | $ 4.94 | |
Non-comparable items: | |||
Restructuring expense | $ 0.30 | $ 0.33 | |
Accelerated depreciation | 0.03 | 0.03 | |
Adjustment associated with Spin-Off related balances | 0.01 | 0.01 | |
Unrealized gain on equity securities | (0.01) | (0.01) | |
Merger and acquisition expense, net | (0.01) | (0.01) | |
Other non-comparable items | 0.01 | 0.01 | |
Adjusted Earnings per Diluted Share | $ 5.05 | $ 5.30 | |
Free Cash Flow Guidance Reconciliation (Unaudited) | |||
Full Year 2026 Guidance | |||
(in millions) | Low | High | |
Net cash provided by operating activities | $ 1,600 | $ 1,700 | |
Capital expenditures, including tooling outlays | (700) | (600) | |
Free cash flow | $ 900 | $ 1,100 | |
Full Year 2026 Organic Net Sales Change Guidance Reconciliation (Unaudited) | |||||||||||||||
(in millions) | FY 2025 Net | FX | Battery | Organic Net | FY 2026 Net | Organic Net | Organic Net | BorgWarner | |||||||
Low | $ 14,316 | $ 175 | $ (250) | $ (241) | $ 14,000 | (1.7) % | (3.4) % | (3.0) % | |||||||
High | $ 14,316 | $ 175 | $ (250) | $ 59 | $ 14,300 | 0.4 % | (1.3) % | — % | |||||||
Full Year 2026 Estimated Year-Over-Year Change in Production (Unaudited) | ||||||||||
Total | BorgWarner | |||||||||
Light vehicle | (2.5)% to | (2)% to | (7)% to (4)% | (3)% to (1)% | (3)% to | |||||
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