BorgWarner lifts 2026 adjusted EPS guidance as third-quarter earnings rise and it books nine new awards
BorgWarner raised its full-year adjusted earnings guidance after a third quarter in which net earnings jumped 47.9% and it won nine new propulsion and electrification awards.
- $1.39
- $3,487 million
- $864 million
- $5.20 to $5.35
What Happened
BorgWarner reported U.S. GAAP net sales of $3,487 million for the third quarter of 2026, a decrease of approximately 2.9% compared with the same period of 2025, with organic net sales down 3.1% excluding the impact of foreign currencies. The company said the decline was driven primarily by declining market production volumes and lower Battery Energy Systems segment sales. Despite that, the U.S. GAAP operating margin rose 180 basis points to 8.7%, and the adjusted operating margin was 10.9%, up 20 basis points. BorgWarner credited continued cost controls for delivering strong performance in a lower industry production environment, and said it made progress on product readiness for data center and industrial markets while accelerating quoting activity for its industrial solutions.
- 8.7%, up 180 basis points
- 10.9%, up 20 basis points
- $1.39, up 12.1% from $1.24
$1.39
Up 12.1% year over year even as net sales fell about 2.9%.
U.S. GAAP net earnings were $221 million, up from $158 million a year earlier, and U.S. GAAP diluted earnings per share were $1.08, a 47.9% increase from $0.73. Adjusted net earnings were $1.39 per diluted share after excluding $0.31 of net non-comparable items per diluted share; the 2025 quarter excluded $0.51. Operating income was $302 million on a GAAP basis, or $381 million adjusted after excluding $79 million of pretax non-comparable expenses. The quarter generated $320 million of net cash from operating activities and $195 million of free cash flow, while BorgWarner reduced gross debt by $864 million through a debt tender and make-whole redemption, repurchased approximately $175 million of its shares and paid a $35 million cash dividend.
- Engine control module award with a global OEM for a new internal combustion engine pickup truck platform, with production expected to begin in 2029.
- Three conquest turbocharger awards with a global powertrain leader for light vehicle gasoline platforms in South America and Europe, with production expected to begin in 2027.
- First aluminum-wire eMotor program award with a major Chinese OEM for hybrid vehicles, including generator and traction motors for auxiliary drive applications, with production expected to begin in 2026.
- Three eMotor awards with leading OEMs in China for range-extended, battery-electric and hybrid vehicle applications, with production expected to begin between 2027 and 2028.
- High-voltage inverter award with a global OEM for its next-generation battery-electric vehicle programs, building on an established customer relationship.
Aluminum-wire eMotor program with a major Chinese OEM for hybrid vehicles
Three conquest turbocharger awards for gasoline platforms in South America and Europe
Three eMotor awards with leading Chinese OEMs for range-extended, battery-electric and hybrid applications
Engine control module for a global OEM's new internal combustion engine pickup truck platform
BorgWarner raised its 2026 adjusted earnings per share guidance to $5.20 to $5.35 from a previous range of $5.05 to $5.30, citing the expected impact of share repurchases and a lower full-year effective tax rate. GAAP net earnings are expected at $4.65 to $4.84 per diluted share, with a GAAP operating margin of 9.3% to 9.6% and an adjusted operating margin of 10.7% to 10.9%. Net sales guidance was narrowed to $14.0 billion to $14.2 billion from a previous $14.0 billion to $14.3 billion, compared with about $14.3 billion in 2025, implying organic net sales down 4% to down 2.5%. That outlook assumes the weighted light vehicle market falls 2% to 1%, includes a roughly $250 million year-over-year decline in Battery Energy Systems sales, a roughly $250 million currency tailwind from a stronger Euro and Chinese Renminbi, and a $10 million to $15 million industrial R&D investment. Full-year operating cash flow is guided at $1,600 million to $1,700 million and free cash flow at $900 million to $1,100 million, consistent with previous guidance.
Previously from BorgWarner Inc.
In August 2026 BorgWarner set pricing terms for cash tender offers on its senior notes, announcing reference yields and tender considerations across five senior note series. The four non-any-and-all offers were capped at $720 million, with a separate any-and-all series.
Background drawn from MotorClaw's earlier coverage of BorgWarner Inc.'s official releases.
Why this matters
The results show how a large auto supplier is protecting profit even as vehicle production falls: net sales slipped about 2.9% but margins and per-share earnings rose. The nine awards, covering combustion, hybrid and electric programs for OEMs in China, South America and Europe, show where the company expects future volume — relevant to investors, rival suppliers and the plants that will build those parts.
Terms in This Story
- Basis point
- One hundredth of a percentage point; 100 basis points equal 1 percentage point.
- Adjusted operating margin
- Operating margin recalculated after stripping out items the company deems non-comparable, such as restructuring, merger and acquisition expenses, to show underlying performance.
- Free cash flow
- Cash generated by the business after capital spending, reported alongside operating cash flow.
- eMotor
- An electric motor used in hybrid and battery-electric vehicle drive systems.
Summarised from the linked release; details can be imperfect — always verify against the original source.