Borgwarner Stock Earnings Reports

BorgWarner reported Q1 2026 sales of $3.5 billion, with organic sales down roughly 3% year-over-year excluding a decline in its Battery Energy Systems business (which was a notable headwind). Adjusted operating income was $372 million (10.5% adjusted operating margin), a 50-basis-point improvement vs. prior year, and adjusted EPS rose ~12% driven by operating performance and significant share repurchases. Free cash flow was $13 million for the quarter (a $48 million year-over-year improvement). Management reiterated unchanged full-year 2026 guidance: total sales $14.0–$14.3 billion, adjusted operating margin 10.7%–10.9%, adjusted EPS $5.00–$5.20, and free cash flow $900 million–$1.1 billion. Key strategic developments include 12 new business awards across propulsion and e-products (EV motors, turbocharger wins, drivetrain/timing wins), continued progress on a turbine-generator for data center power with B-sample deliveries and UL work underway targeting production in 2027, and expansion into industrial/data-center markets with battery energy storage systems (BESS) and bidirectional microgrid inverters (both targeted production readiness in 2027). Capital allocation remains shareholder-friendly: ~$185 million returned in the quarter and >$650 million in repurchases over the prior four quarters (>$800M over five quarters). Management emphasized cost controls, disciplined M&A criteria (must leverage core competencies, be accretive, and be fairly priced), and confidence in achieving full-year guidance despite market uncertainty and declining battery demand. Primary risks called out: near-term battery market weakness, broader macro/market uncertainty, and the usual product/supply-chain execution risks as new industrial products scale.