Business
BorgWarner Reports Strong Second Quarter 2026 Results, Increases 2026 Adjusted EPS Guidance and Share Repurchase Authorization By $1 Billion, Announces 7 Awards Across Portfolio to Support Long-Term Profitable Growth
BorgWarner Reports Strong Second Quarter 2026 Results, Increases 2026 Adjusted EPS Guidance and Share Repurchase Authorization By $1 Billion, Announces 7
About this update from Borgwarner Inc.
Auburn Hills, Michigan - BorgWarner Inc. (NYSE: BWA) today reported second quarter results for 2026. Second Quarter Results and Business Update BorgWarner's (the 'Company') U.S . GAAP net sales increased approximately 0.3%, while organic net sales decreased approximately 1.2%, 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's organic net sales were up modestly year-over-year. The Company achieved a U.S . GAAP operating margin of 10.1% 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 of 11.3%, 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 of its outstanding shares and paid a $34 million cash dividend to its shareholders during the second quarter of 2026. The Company's Board of Directors authorized an increase to its share repurchase program of $1 billion , bringing the Company's total authorization to approximately $1.35 billion , which is intended to allow management to repurchase the Company's outstanding shares through 2029. 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 , an increase of approximately 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. U.S . GAAP net earnings of $1.34 per diluted share. Excluding $0.08 of net losses per diluted share related to non-comparable items (detailed in the table below), adjusted net earnings were $1.42 per diluted share, an increase of 17.4% compared with the second quarter of 2025. U.S . GAAP operating income of $370 million , or 10.1% of net sales. Excluding $43 million of pretax expenses related to non-comparable items, adjusted operating income was $413 million , or 11.3% of net sales. Net cash provided by operating activities of $586 million . Free cash flow of $492 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. Net sales were $3,648 million for the second quarter of 2026, an increase of approximately 0.3% compared with the second quarter of 2025. This increase was due to stronger foreign currencies compared to the U.S . dollar, partially offset by declining market production volumes and lower Battery Energy Systems segment sales. Net earnings for the second quarter of 2026 were $277 million , compared with net earnings of $224 million for the second quarter of 2025. Net earnings per share for the second quarter of 2026 were $1.34 per diluted share, up 30.1% from $1.03 per diluted share for the second quarter of 2025. Adjusted net earnings per diluted share for the second quarter of 2026 were $1.42 , up 17.4% from adjusted net earnings per diluted share of $1.21 for the second quarter of 2025. Adjusted net earnings for the second quarter of 2026 excluded net non-comparable items of $(0.08) per diluted share, while adjusted net earnings for the second quarter of 2025 excluded net non-comparable items of $(0.18) 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 higher adjusted operating income and the impact of a lower share count as a result of 2025 and 2026 share repurchases. 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 3% to approximately flat and a decline in the Company's Battery Energy Systems segment sales. Net sales are expected to be in the range of $14.0 billion to $14.3 billion in 2026, compared with 2025 net sales of approximately $14.3 billion . The Company's net sales guidance implies a year-over-year change in organic net sales of down 3.5% to down 1.5%. 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 $175 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 9.6% to 9.8% 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 $4.72 to $4.94 per diluted share. Excluding the impact of noncomparable items, adjusted net earnings are expected to be in the range of $5.05 to $5.30 per diluted share, compared to the Company's previous adjusted net earnings range of $5.00 to $5.20 per diluted share. The increase is due to the impact of the Company's share repurchases during the first half of 2026. 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 . 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 . (C) 2026 Electronic News Publishing, source ENP Newswire