BorgWarner Raises 2026 Profit Outlook and Boosts Buyback by $1 Billion After Strong Q2

BorgWarner's second-quarter net sales were $3,648 million, up about 0.3% year over year, helped by stronger foreign currencies but partly offset by lower production volumes and a $60 million decline in Battery Energy Systems sales; organic net sales fell 1.2%, and excluding the battery segment, organic sales rose modestly. GAAP operating income was $370 million, a 10.1% margin (up 220 basis points), while adjusted operating income was $413 million, an 11.3% margin (up 100 basis points). Net earnings rose to $277 million, or $1.34 per diluted share, from $224 million, or $1.03, a year earlier. Adjusted net earnings were $1.42 per diluted share, up 17.4%, excluding $0.08 of net losses from non-comparable items. Operating cash flow was $586 million and free cash flow $492 million.

During the quarter, BorgWarner repurchased about $100 million of its shares and paid $34 million in dividends. The board also increased its share repurchase authorization by $1 billion, bringing the total to roughly $1.35 billion, which the company intends to use through 2029.

For full-year 2026, BorgWarner raised its adjusted earnings per share guidance to $5.05-$5.30, from $5.00-$5.20, reflecting first-half share repurchases; GAAP net earnings are expected at $4.72-$4.94 per diluted share. Net sales are still guided at $14.0-$14.3 billion, implying organic sales down 3.5% to 1.5%, with an expected $250 million decline in Battery Energy Systems sales (a 1.7% headwind) and a $175 million currency-related increase. The company forecasts a GAAP operating margin of 9.6%-9.8% and an adjusted operating margin of 10.7%-10.9%, with operating cash flow of $1.6-$1.7 billion and free cash flow of $0.9-$1.1 billion. BorgWarner also plans to raise R&D spending to accelerate data center and industrial market growth, despite expecting light vehicle markets to fall 3% to be flat.