BorgWarner Reports Strong Third Quarter 2026 Results, Increases 2026 Adjusted EPS Guidance, Announces 9 Awards Across Portfolio to Support Long-Term Profitable Growth

The higher adjusted earnings outlook reflects expected share-repurchase benefits and a lower full-year effective tax rate.

Rhea-AI Summary

BorgWarner (NYSE: BWA) raised its 2026 adjusted earnings guidance after third-quarter diluted earnings increased to $1.08 per share despite lower sales. Revenue fell approximately 2.9% year over year to $3,487 million, while adjusted earnings per share rose 12.1% to $1.39. GAAP operating margin increased 180 basis points to 8.7%; adjusted margin rose 20 basis points to 10.9%.

The company now expects adjusted earnings of $5.20–$5.35 per share, versus $5.05–$5.30 previously. Its sales forecast narrowed to $14.0–$14.2 billion from $14.0–$14.3 billion. Full-year free cash flow guidance remained $900–$1,100 million. During the quarter, gross debt fell $864 million and share repurchases totaled approximately $175 million. BorgWarner also secured nine business awards spanning engine controls, turbochargers, electric motors and an inverter.

28 points · 1 major

MixediHow this balance works

How this balance works

Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.

It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.

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How the balance worksHow Sentiment works

0 major · 17 points

Hollow bars mark forward-looking points. How the balance works

Positive

• Major point. Forward-looking: it has not happened yet and may not happen.2026 adjusted EPS guidance increased to $5.20–$5.35 from $5.05–$5.30.
• Moderate pointThird-quarter GAAP diluted earnings rose 47.9% to $1.08, versus $0.73 a year earlier.
• Moderate pointThird-quarter adjusted diluted earnings rose 12.1% to $1.39, versus $1.24 a year earlier.
• Moderate pointThird-quarter attributable net earnings increased to $221 million from $158 million in 2025.
• Moderate pointThird-quarter GAAP operating income increased to $302 million from $248 million a year earlier.
• Moderate pointThird-quarter GAAP operating margin expanded 180 basis points to 8.7% year over year.
• Moderate pointGross debt decreased $864 million through a third-quarter debt tender and redemption. 7.6% of market cap
• Moderate pointThird-quarter share repurchases returned approximately $175 million to shareholders. 1.5% of market cap
• Moderate point. Forward-looking: it has not happened yet and may not happen.BorgWarner expects 2026 GAAP diluted earnings of $4.65–$4.84 per share.
• Moderate point. Forward-looking: it has not happened yet and may not happen.BorgWarner expects 2026 GAAP operating margin of 9.3%–9.6% and adjusted operating margin of 10.7%–10.9%.
• Moderate pointPowerDrive Systems third-quarter sales increased to $705 million from $582 million in 2025.
• Moderate pointPowerDrive Systems third-quarter adjusted operating loss narrowed to $5 million from $35 million in 2025.
• Moderate pointNine-month attributable net earnings increased to $740 million from $539 million in 2025.
• Moderate pointNine-month diluted earnings increased to $3.59 GAAP and $4.05 adjusted, versus $2.48 and $3.57 in 2025.
• Moderate pointNine-month GAAP operating income increased to $1,008 million from $774 million in 2025.

13 minor points

• Minor pointThird-quarter adjusted operating margin expanded 20 basis points to 10.9%; adjusted operating income was $381 million.
• Minor pointThird-quarter operating cash flow was $320 million; free cash flow was $195 million.
• Minor point. Forward-looking: it has not happened yet and may not happen.2026 cash flow guidance remains $1,600–$1,700 million operating and $900–$1,100 million free cash flow.
• Minor point. Forward-looking: it has not happened yet and may not happen.Currency movements are expected to increase 2026 sales approximately $250 million year over year.
• Minor point. Forward-looking: it has not happened yet and may not happen.Engine control module award covers a new pickup platform; production is expected to begin in 2029.
• Minor point. Forward-looking: it has not happened yet and may not happen.Three turbocharger awards cover gasoline platforms in South America and Europe; production is expected to begin in 2027.
• Minor point. Forward-looking: it has not happened yet and may not happen.First aluminum-wire electric motor award covers Chinese hybrid vehicles; production is expected to begin in 2026.
• Minor point. Forward-looking: it has not happened yet and may not happen.Three electric motor awards cover Chinese vehicle programs; production is expected to begin between 2027 and 2028.
• Minor point. Forward-looking: it has not happened yet and may not happen.High-voltage inverter award extends an existing customer relationship for next-generation battery-electric vehicle programs.
• Minor pointBattery Energy Systems third-quarter adjusted operating loss narrowed to $3 million from $7 million in 2025.
• Minor pointNine-month operating cash flow increased to $1,058 million from $1,029 million in 2025.
• Minor pointThird-quarter selling, general and administrative expenses fell to $310 million from $341 million in 2025.
• Minor pointLong-term debt fell to $1,901 million at September 30, 2026, from $3,894 million at December 31, 2025.

Negative

• Moderate pointThird-quarter sales fell approximately 2.9% to $3,487 million; organic sales declined 3.1% year over year.
• Moderate point. Forward-looking: it has not happened yet and may not happen.BorgWarner expects 2026 organic sales to decline 4%–2.5% year over year.
• Moderate point. Forward-looking: it has not happened yet and may not happen.Battery Energy Systems sales are expected to decline approximately $250 million in 2026, a roughly 1.7% organic-growth headwind.
• Moderate pointTurbos & Thermal Technologies third-quarter sales fell to $1,372 million from $1,437 million in 2025.
• Moderate pointTurbos & Thermal Technologies third-quarter adjusted operating income fell to $201 million from $219 million in 2025.
• Moderate pointDrivetrain & Morse Systems third-quarter sales fell to $1,346 million from $1,452 million in 2025.
• Moderate pointDrivetrain & Morse Systems third-quarter adjusted operating income fell to $250 million from $267 million in 2025.
• Moderate pointThird-quarter restructuring expense increased to $50 million from $23 million in 2025.
• Moderate pointCash, cash equivalents and restricted cash fell to $1,583 million at September 30, from $2,313 million at year-end 2025.

8 minor points

• Minor point. Forward-looking: it has not happened yet and may not happen.2026 sales guidance narrowed to $14.0–$14.2 billion, versus $14.0–$14.3 billion previously and approximately $14.3 billion in 2025.
• Minor point. Forward-looking: it has not happened yet and may not happen.BorgWarner expects its weighted light vehicle market to decline 2%–1% in 2026.
• Minor point. Forward-looking: it has not happened yet and may not happen.Industrial research and development investment is expected to cost $10–$15 million in 2026.
• Minor pointBattery Energy Systems third-quarter sales fell to $78 million from $132 million in 2025.
• Minor pointThird-quarter pension settlement and debt extinguishment losses were $0.04 and $0.02 per diluted share, respectively.
• Minor pointNine-month sales declined to $10,668 million from $10,744 million in 2025.
• Minor pointNine-month capital expenditures, including tooling, increased to $364 million from $307 million in 2025.
• Minor pointShort-term debt rose to $1,106 million at September 30, 2026, from $5 million at December 31, 2025.

Key Figures

Third-quarter net sales: $3,487 million; approximately 2.9% lower year over year GAAP diluted EPS: $1.08 per diluted share; up 47.9% year over year Adjusted diluted EPS: $1.39 per diluted share; up 12.1% year over year +5 more

Third-quarter net sales

$3,487 million; approximately 2.9% lower year over year

Q3 2026

GAAP diluted EPS

$1.08 per diluted share; up 47.9% year over year

Q3 2026

Adjusted diluted EPS

$1.39 per diluted share; up 12.1% year over year

Q3 2026

Adjusted EPS guidance

$5.20–$5.35 per diluted share, raised from $5.05–$5.30

Full-year 2026

Net sales guidance

$14.0–$14.2 billion

Full-year 2026; range narrowed from $14.0–$14.3 billion

Adjusted operating margin guidance

10.7%–10.9%

Full-year 2026

Gross debt reduction

$864 million

Q3 2026

New business awards

9 awards

Across the portfolio

Previous Earnings Reports

3 past events · Latest: May 06

Same Type 3 events

1. May 06

   Q1 earnings report

   24h Move

   +3.8%

   Reported Q1 2026 sales and margins, returned capital, and maintained full-year guidance.

2. Oct 30

   Q3 earnings report

   24h Move

   +3.1%

   Reported Q3 sales and adjusted EPS growth while raising full-year guidance.

3. Jul 31

   Q2 earnings report

   24h Move

   +6.6%

   Reported Q2 results, raised annual guidance, and secured portfolio awards.

24h Move is the share-price change in the day after each event; other market factors may also have contributed.

Key Terms

basis points, make-whole redemption, weighted average number of diluted shares

3 terms

basis points financial

"an increase of 180 basis points"

Basis points are a way to measure small changes in interest rates or percentages, where one basis point equals 0.01%. For example, if a loan's interest rate increases by 50 basis points, it's gone up by 0.50%. They help people understand tiny differences in rates that can add up over time, making financial comparisons clearer.

make-whole redemption financial

"a debt tender and make-whole redemption"

A make-whole redemption is a bond call provision that lets the issuer repay the bond before its scheduled maturity by paying bondholders the present value of the remaining scheduled principal and interest payments plus, typically, a small premium. The present value is calculated by discounting those future payments using a specified reference rate (commonly comparable U.S. Treasury yields) plus a spread set in the bond indenture, so the payment is intended to compensate holders for the interest they lose when the debt is retired early.

weighted average number of diluted shares financial

"the weighted average number of diluted shares for the periods presented"

The weighted average number of diluted shares is the average number of common shares outstanding during a reporting period after adjusting for the potential increase in shares from all dilutive securities (for example, stock options, warrants, convertible debt or preferred stock). Accountants start with the weighted average basic shares for the period and then add the incremental shares that would arise if dilutive instruments were converted or exercised, applying standard methods (such as the treasury-stock method for options and warrants and the if-converted method for convertibles); this figure is used to calculate diluted earnings per share and will never be less than the basic weighted average shares when instruments are dilutive.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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AUBURN HILLS, Mich., Oct 29, 2026 /PRNewswire/ -- BorgWarner Inc. (NYSE: BWA) today reported third quarter results for 2026.

Third Quarter Results and Business Highlights

• BorgWarner (the "Company") achieved a U.S. GAAP operating margin of 8.7% during the third quarter of 2026, or an increase of 180 basis points, compared with the third quarter of 2025. The Company achieved an adjusted operating margin of 10.9%, or an increase of 20 basis points, compared with the third 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 successfully executed a debt tender and make-whole redemption to reduce its gross debt balance by $864 million during the third quarter of 2026.  
• The Company repurchased approximately $175 million of its outstanding shares and paid a $35 million cash dividend to its shareholders during the third quarter of 2026.
• The Company continued to make progress in its product readiness across its portfolio offerings for the data center and industrial markets. Additionally, the Company has accelerated its quoting activity for its industrial solutions.

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:

Foundational Awards

• Engine control module award with a global OEM for a new internal combustion engine pickup truck platform. Production is expected to begin in 2029.
• Three conquest turbocharger awards with a global powertrain leader for light vehicle gasoline platforms in South America and Europe. Production is expected to begin in 2027.

eProduct Awards

• First aluminum-wire eMotor program award with a major Chinese OEM for hybrid vehicles, including generator and traction motors for auxiliary drive applications. Production is expected to begin in 2026.
• Three eMotor awards with leading OEMs in China for range-extended, battery-electric and hybrid vehicle applications. Production is expected to begin between 2027 and 2028.
• High-voltage inverter award with a global OEM for its next-generation battery-electric vehicle programs. This award builds on an established customer relationship.

Third Quarter Summary:

• U.S. GAAP net sales of $3,487 million, a decrease of approximately 2.9% compared with the third quarter of 2025.
  • Excluding the impact of foreign currencies, organic net sales decreased 3.1% compared with the third quarter of 2025.
• U.S. GAAP net earnings of $1.08 per diluted share, an increase of 47.9% compared with the third quarter of 2025.
  • Excluding $0.31 of net losses per diluted share related to non-comparable items (detailed in the table below), adjusted net earnings were $1.39 per diluted share, an increase of 12.1% compared with the third quarter of 2025.
• U.S. GAAP operating income of $302 million, or 8.7% of net sales.
  • Excluding $79 million of pretax expenses related to non-comparable items, adjusted operating income was $381 million, or 10.9% of net sales.
• Net cash provided by operating activities of $320 million.
  • Free cash flow of $195 million.

Financial Results:
The Company believes the following table is useful in highlighting non-comparable items that impacted its U.S. GAAP net earnings per diluted share. The non-comparable items presented below are calculated after tax using the corresponding effective tax rate discrete to each item and the weighted average number of diluted shares for the periods presented. 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.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2026		2025		2026		2025
Earnings per diluted share	$          1.08		$          0.73		$          3.59		$          2.48
Non-comparable items:
Restructuring expense	0.20		0.10		0.32		0.26
Accelerated depreciation	0.04		0.19		0.07		0.28
U.S. pension plan settlement loss	0.04		—		0.04		—
Loss on debt extinguishment	0.02		—		0.02		—
Adjustments associated with Spin-Off related balances	—		0.04		0.01		0.03
Impairment charges	—		—		—		0.16
Write-off of customer incentive asset	—		—		—		0.03
Costs to exit charging business	—		—		—		0.14
Legal settlement	—		0.18		—		0.18
Chief Executive Officer ("CEO") transition compensation	—		0.02		—		0.05
Loss on sale of assets	—		0.01		—		0.02
Loss on sale of businesses	—		0.01		—		0.01
Insurance recovery	—		(0.07)		—		(0.07)
Merger and acquisition (income) expense , net	—		—		(0.01)		0.02
Unrealized (gain) loss on equity securities	(0.02)		(0.01)		(0.03)		(0.01)
Tax adjustments	0.02		—		0.02		(0.06)
Other non-comparable items	0.01		0.04		0.02		0.05
Adjusted earnings per diluted share	$          1.39		$          1.24		$          4.05		$          3.57

Net sales were $3,487 million for the third quarter of 2026, a decrease of approximately 2.9% compared with the third quarter of 2025. This decrease was primarily driven by declining market production volumes and lower Battery Energy Systems segment sales. Net earnings for the third quarter of 2026 were $221 million, compared with net earnings of $158 million for the third quarter of 2025. Net earnings per diluted share for the third quarter of 2026 were $1.08, up 47.9% from $0.73 per diluted share for the third quarter of 2025. Adjusted net earnings per diluted share for the third quarter of 2026 were $1.39, up 12.1% from adjusted net earnings per diluted share of $1.24 for the third quarter of 2025. Adjusted net earnings for the third quarter of 2026 excluded net non-comparable items of $(0.31) per diluted share, while adjusted net earnings for the third quarter of 2025 excluded net non-comparable items of $(0.51) per diluted share. These and other non-comparable items are listed in the table above, which is provided by the Company for comparison with other results and the most directly comparable U.S. GAAP measures. The increase in adjusted net earnings per diluted share was primarily due to a lower full year effective tax rate and the impact of a lower share count resulting from share repurchases in 2025 and 2026.

Full Year 2026 Guidance Update: The Company increased its 2026 adjusted earnings per share guidance due to the expected impacts of the Company's share repurchases and a decline in its full year effective tax rate.

At the midpoint of its 2026 guidance, the Company expects to deliver another year of adjusted operating margin expansion and adjusted earnings per share growth despite the Company's expectation that its weighted light vehicle market will be down 2% to down 1% and a $10 million to $15 million industrial R&D investment to support long-term profitable growth. Net sales are expected to be in the range of $14.0 billion to $14.2 billion in 2026, compared with 2025 net sales of approximately $14.3 billion. The Company's net sales guidance range has been narrowed from its previous forecast of $14.0 billion to $14.3 billion due to lower industry production expectations at the high-end of the Company's previous guidance. The Company's net sales guidance implies a year-over-year change in organic net sales of down 4% to down 2.5%. The Company's net sales guidance includes an expected year-over-year sales decline of approximately $250 million in the Company's Battery Energy Systems segment, which represents approximately a 1.7% headwind to organic net sales growth in 2026. Foreign currencies are expected to result in a year-over-year increase in sales of approximately $250 million primarily due to the strengthening of the Euro and Chinese Renminbi against the U.S. dollar.

U.S. GAAP operating margin is expected to be in the range of 9.3% to 9.6% in 2026. Excluding the impact of non-comparable items and the add-back of intangible asset amortization expense, adjusted operating margin is expected to be in the range of 10.7% to 10.9%. U.S. GAAP net earnings are expected to be within the range of $4.65 to $4.84 per diluted share. Excluding the impact of non-comparable items, adjusted net earnings are expected to be in the range of $5.20 to $5.35 per diluted share, compared with the Company's previous adjusted net earnings guidance range of $5.05 to $5.30 per diluted share. This increase is due to the expected impacts of the Company's share repurchases and a decline in its full year effective tax rate. Full year operating cash flow is expected to be in the range of $1,600 million to $1,700 million, while free cash flow is expected to be in the range of $900 million to $1,100 million, consistent with the Company's previous guidance.

At 9:30 a.m. ET today, a brief conference call concerning third 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 cost control and restructuring initiatives, 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 September 30,				Nine Months Ended September 30,
	2026		2025		2026		2025
Net sales	$          3,487		$          3,591		$        10,668		$        10,744
Cost of sales	2,825		2,927		8,608		8,801
Gross profit	662		664		2,060		1,943
Gross margin	19.0 %		18.5 %		19.3 %		18.1 %
Selling, general and administrative expenses	310		341		969		973
Restructuring expense	50		23		89		71
Other operating expense (income), net	—		52		(6)		83
Impairment charges	—		—		—		42
Operating income	302		248		1,008		774
Equity in affiliates' (earnings) loss, net of tax	(10)		(11)		(26)		(29)
Unrealized (gain) loss on equity securities	(4)		(1)		(7)		(2)
Interest expense (income), net	6		9		27		33
Other postretirement expense (income)	12		3		16		8
Earnings before income taxes and noncontrolling interest	298		248		998		764
Provision for income taxes	65		75		219		188
Net earnings	233		173		779		576
Net earnings attributable to noncontrolling interest	12		15		39		37
Net earnings attributable to BorgWarner Inc.	$             221		$             158		$             740		$             539
Earnings per share attributable to BorgWarner Inc. — basic	$            1.10		$            0.74		$            3.64		$            2.50
Earnings per share attributable to BorgWarner Inc. — diluted	$            1.08		$            0.73		$            3.59		$            2.48
Weighted average shares outstanding:
Basic	201.4		213.7		203.2		215.7
Diluted	204.6		216.5		206.4		217.6

           

BorgWarner Inc.
Net Sales by Reportable Segment (Unaudited)
(in millions)
	Three Months Ended September 30,				Nine Months Ended September 30,
	2026		2025		2026		2025
Turbos & Thermal Technologies	$         1,372		$         1,437		$         4,247		$         4,372
Drivetrain & Morse Systems	1,346		1,452		4,223		4,242
PowerDrive Systems	705		582		1,957		1,724
Battery Energy Systems	78		132		280		441
Inter-segment eliminations	(14)		(12)		(39)		(35)
Net sales	$         3,487		$         3,591		$        10,668		$        10,744
Segment Adjusted Operating Income (Loss) (Unaudited)
(in millions)
	Three Months Ended September 30,				Nine Months Ended September 30,
	2026		2025		2026		2025
Turbos & Thermal Technologies	$           201		$           219		$           640		$           681
Drivetrain & Morse Systems	250		267		787		770
PowerDrive Systems	(5)		(35)		(70)		(111)
Battery Energy Systems	(3)		(7)		(7)		(41)
Segment Adjusted Operating Income	443		444		1,350		1,299
Corporate, including stock-based compensation	62		59		184		189
Restructuring expense	50		23		89		71
Intangible asset amortization expense	13		16		43		49
Accelerated depreciation	11		60		20		81
Adjustments associated with Spin-Off related balances	—		8		1		7
Legal settlement	—		38		—		38
Impairment charges	—		—		—		42
Write-off of customer incentive asset	—		—		—		7
Costs to exit charging business	—		—		—		32
Chief Executive Officer ("CEO") transition compensation	—		5		—		11
Loss on sale of assets	—		1		—		6
Loss on sale of businesses	—		1		—		2
Insurance recovery	—		(21)		—		(21)
Merger and acquisition expense (income), net	1		2		(1)		4
Other non-comparable items	4		4		6		7
Equity in affiliates' (earnings) loss, net of tax	(10)		(11)		(26)		(29)
Unrealized (gain) loss on equity securities	(4)		(1)		(7)		(2)
Interest expense (income), net	6		9		27		33
Other postretirement expense (income)	12		3		16		8
Earnings before income taxes and noncontrolling interest	298		248		998		764
Provision for income taxes	65		75		219		188
Net earnings	233		173		779		576
Net earnings attributable to noncontrolling interest	12		15		39		37
Net earnings attributable to BorgWarner Inc.	$           221		$           158		$           740		$           539

           

BorgWarner Inc.
Condensed Consolidated Balance Sheets (Unaudited)
(in millions)
	September 30, 2026		December 31, 2025
ASSETS
Cash, cash equivalents and restricted cash	$             1,583		$             2,313
Receivables, net	3,075		2,962
Inventories	1,299		1,207
Prepayments and other current assets	390		313
Total current assets	6,347		6,795
Property, plant and equipment, net	3,229		3,330
Other non-current assets	3,640		3,644
Total assets	$           13,216		$           13,769
LIABILITIES AND EQUITY
Short-term debt	$             1,106		$                    5
Accounts payable	2,137		1,996
Other current liabilities	1,255		1,281
Total current liabilities	4,498		3,282
Long-term debt	1,901		3,894
Other non-current liabilities:	951		979
Total liabilities	7,350		8,155
Total BorgWarner Inc. stockholders' equity	5,671		5,442
Noncontrolling interest	195		172
Total equity	5,866		5,614
Total liabilities and equity	$           13,216		$           13,769

             

BorgWarner Inc.
Condensed Consolidated Statements of Cash Flows (Unaudited)
(in millions)
	Nine Months Ended September 30,
	2026		2025
OPERATING ACTIVITIES
Net cash provided by operating activities	$         1,058		$         1,029
INVESTING ACTIVITIES
Capital expenditures, including tooling outlays	(364)		(307)
Customer advances related to capital expenditures	6		16
Insurance proceeds received for damage to property, plant and equipment	—		4
Proceeds from settlement of net investment hedges, net	18		18
Payments for investments in equity securities	(2)		—
Proceeds from the sale of business, net	—		7
Proceeds from asset disposals and other, net	2		16
Net cash used in investing activities	(340)		(246)
FINANCING ACTIVITIES
Payments of notes payable	—		(5)
Additions to debt	3		—
Repayments of debt, including current portion	(864)		(406)
Payments for purchase of treasury stock	(425)		(210)
Payments for excise tax on purchase of treasury stock	(5)		—
Payments for stock-based compensation items	(34)		(22)
Payment for business acquired, net of cash acquired	(3)		—
Payments for contingent consideration	(1)		(4)
Dividends paid to BorgWarner stockholders	(104)		(84)
Dividends paid to noncontrolling stockholders	(13)		(22)
Net cash used in financing activities	(1,446)		(753)
Effect of exchange rate changes on cash	(2)		48
Net (decrease) increase in cash, cash equivalents and restricted cash	(730)		78
Cash and cash equivalents at beginning of year	2,313		2,094
Cash, cash equivalents and restricted cash at end of period	$         1,583		$         2,172
Supplemental Information (Unaudited)
(in millions)
	Nine Months Ended September 30,
	2026		2025
Depreciation and tooling amortization	$           404		$           504
Intangible asset amortization	$             43		$             49

Non-GAAP Financial Measures
This press release contains information about the Company's financial results that is not presented in accordance with U.S. GAAP. Such non-GAAP financial measures are reconciled to their closest U.S. GAAP financial measures below and in the Financial Results table above. The provision of these comparable U.S. GAAP financial measures for 2026 is not intended to indicate that the Company is explicitly or implicitly providing projections on those U.S. GAAP financial measures and actual results for such measures are likely to vary from those presented. The reconciliations include all information reasonably available to the Company at the date of this press release and the adjustments that management can reasonably predict.

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 U.S. GAAP measure. Additionally, because not all companies use identical calculations, the non-GAAP financial measures as presented by the Company may not be comparable to similarly titled measures reported by other companies.

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 September 30,				Nine Months Ended September 30,
(in millions)	2026		2025		2026		2025
Net sales	$       3,487		$       3,591		$     10,668		$     10,744
Operating income	$          302		$          248		$       1,008		$          774
Operating margin	8.7 %		6.9 %		9.4 %		7.2 %
Non-comparable items:
Restructuring expense	$            50		$            23		$            89		$            71
Intangible asset amortization expense	13		16		43		49
Accelerated depreciation	11		60		20		81
Adjustments associated with Spin-Off related balances	—		8		1		7
Legal settlement	—		38		—		38
Impairment charges	—		—		—		42
Costs to exit charging business	—		—		—		32
Chief Executive Officer ("CEO") transition compensation	—		5		—		11
Write-off of customer incentive asset	—		—		—		7
Loss on sale of assets	—		1		—		6
Loss on sale of businesses	—		1		—		2
Insurance recovery	—		(21)		—		(21)
Merger and acquisition expense (income), net	1		2		(1)		4
Other non-comparable items	4		4		6		7
Adjusted operating income	$          381		$          385		$       1,166		$       1,110
Adjusted operating margin	10.9 %		10.7 %		10.9 %		10.3 %

 

Free Cash Flow Reconciliation (Unaudited)
	Three Months Ended September 30,				Nine Months Ended September 30,
(in millions)	2026		2025		2026		2025
Net cash provided by operating activities	$           320		$           368		$         1,058		$         1,029
Capital expenditures, including tooling outlays	(125)		(111)		(364)		(307)
Customer advances related to capital expenditures	—		9		6		16
Free cash flow	$           195		$           266		$           700		$           738

 

Third Quarter 2026 Organic Net Sales Change (Unaudited)
(in millions)	Q3 2025 Net Sales		FX		Organic Net Sales Change		Q3 2026 Net Sales		Organic Net Sales Change %
Turbos & Thermal Technologies	$  1,437		$     (2)		$    (63)		$   1,372		(4.4) %
Drivetrain & Morse Systems	1,452		1		(107)		1,346		(7.4) %
PowerDrive Systems	582		9		114		705		19.6 %
Battery Energy Systems	132		—		(54)		78		(40.9) %
Inter-segment eliminations	(12)		—		(2)		(14)		16.7 %
Net sales	$  3,591		$       8		$  (112)		$  3,487		(3.1) %

 

Year to Date 2026 Organic Net Sales Change (Unaudited)
(in millions)	Q3 2025 YTD Net Sales		FX		Organic Net Sales Change		Q3 2026 YTD Net Sales		Organic Net Sales Change %
Turbos & Thermal Technologies	$  4,372		$    103		$  (228)		$  4,247		(5.2) %
Drivetrain & Morse Systems	4,242		61		(80)		4,223		(1.9) %
PowerDrive Systems	1,724		56		177		1,957		10.3 %
Battery Energy Systems	441		9		(170)		280		(38.5) %
Inter-segment eliminations	(35)		—		(4)		(39)		11.4 %
Total	$ 10,744		$    229		$  (305)		$ 10,668		(2.8) %

 

Adjusted Operating Income and Adjusted Operating Margin Guidance Reconciliation (Unaudited)
	Full Year 2026 Guidance
(in millions)	Low		High
Net sales	$     14,000		$     14,200
Operating income	$       1,308		$       1,363
Operating margin	9.3 %		9.6 %
Non-comparable items:
Restructuring expense	$         110		$         100
Intangible asset amortization	56		56
Accelerated depreciation	20		20
Adjustments associated with Spin-Off related balances	1		1
Merger and acquisition (income) expense, net	(1)		(1)
Other non-comparable items	6		6
Adjusted operating income	$       1,500		$       1,545
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	$               4.65		$               4.84
Non-comparable items:
Restructuring expense	$               0.41		$               0.37
Accelerated depreciation	0.07		0.07
U.S. pension plan settlement loss	0.04		0.04
Loss on debt extinguishment	0.02		0.02
Adjustments associated with Spin-Off related balances	0.01		0.01
Merger and acquisition (income) expense, net	(0.01)		(0.01)
Unrealized (gain) loss on equity securities	(0.03)		(0.03)
Tax adjustments	0.02		0.02
Other non-comparable items	0.02		0.02
Adjusted Earnings per Diluted Share	$               5.20		$               5.35

 

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 Sales		FX		Battery Energy Systems ("BES") Sales Change		Organic Net Sales Change		FY 2026 Net Sales		Organic Net Sales Change Excluding BES %		Organic Net Sales Change Including BES %		BorgWarner LV Weighted Market %
Low	$  14,316		$      250		$    (250)		$    (316)		$  14,000		(2.2) %		(4.0) %		(2.0) %
High	$  14,316		$      250		$    (250)		$    (116)		$  14,200		(0.8) %		(2.6) %		(1.0) %

 

Full Year 2026 Estimated Year-Over-Year Change in Production (Unaudited)
		North America		Europe		China		Total		BorgWarner Weighted Total
Light vehicle		(2.5)% to (1.5)%		0.5% to 1%		(8)% to (6)%		(2.5)% to (1.5)%		(2)% to (1)%

 

 

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SOURCE BorgWarner

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

What were BorgWarner's third-quarter 2026 earnings and sales?

BorgWarner reported $1.08 in GAAP diluted earnings per share and sales of $3,487 million. Adjusted diluted earnings were $1.39 per share. Compared with the third quarter of 2025, GAAP diluted earnings increased 47.9%, adjusted diluted earnings increased 12.1%, and sales decreased approximately 2.9%.

What is BorgWarner's updated 2026 adjusted earnings guidance?

BorgWarner expects $5.20–$5.35 in adjusted diluted earnings per share, up from its previous $5.05–$5.30 range. The company attributes the increase to expected effects of share repurchases and a lower full-year effective tax rate.

When will production begin for BorgWarner's new business awards?

Expected production starts range from 2026 to 2029 across the awards with disclosed timing. The aluminum-wire electric motor program is expected to begin in 2026, turbocharger programs in 2027, three other electric motor programs between 2027 and 2028, and the pickup engine control module program in 2029.