BorgWarner Reports Strong First Quarter 2026 Results, Returned $185 million to Shareholders During First Quarter 2026, Announces 12 Awards Across Portfolio to Support Long-Term Profitable Growth

Published: 2026-05-07 10:28:15 ET BWA

Published on 05/07/2026 at 10:28 am EDT

Auburn Hills, Michigan - BorgWarner Inc. (NYSE: BWA) today reported first quarter results for 2026.

First Quarter Results and Business Update

BorgWarner's (the 'Company') U.S. GAAP net sales increased approximately 1%, while organic net sales decreased approximately 4.2%, year-over-year compared with the first quarter of 2025. Excluding the decline in Battery Energy Systems segment sales, this performance was roughly in line with the Company's weighted light vehicle markets.

The Company achieved a U.S. GAAP operating margin of 9.5% during the first quarter of 2026, or a decrease of 280 basis points, compared with the first quarter of 2025. The Company achieved an adjusted operating margin of 10.5%, or an increase of 50 basis points, compared with the first 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 returned approximately $185 million to its shareholders during the first quarter of 2026. This included the repurchase of approximately $150 million of its outstanding shares and a $35 million cash dividend payment.

The Company continues to expand its data center and industrial portfolio. This now includes battery energy storage systems and bi-directional microgrid inverters. Additionally, the Company's planned 2027 turbine generator system launch is on track with B-samples being delivered to the customer.

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:

Seven-year contract extension to supply eight families of engine, machine, power module, and battery management system controllers. This program starts in 2026 with a world-leading off highway engine and machine manufacturer for large diesel engine applications.

Three turbocharger program extension awards and one conquest award with a major European OEM. Production is expected to begin in phases starting in 2026 through 2029.

Conquest variable turbine geometry (VTG) turbocharger and exhaust gas recirculation (EGR) cooler awards with a major European commercial vehicle OEM for on-highway use. Production is expected to begin in 2028.

Dual clutch (DCT) award with a Chinese OEM for an SUV platform and a variable cam timing system (VCT) conquest award with a Japanese OEM for a hybrid program. Production is expected to begin in 2026 and 2028, respectively.

Three eMotor awards with Asian OEMs, including two hybrid vehicle awards in China and one

electric vehicle award in South Korea. Production is expected to begin in 2026 and 2027 in

China and 2027 in South Korea.

First Quarter Highlights:

U.S. GAAP net sales of $3,533 million, an increase of approximately 1% compared with the first quarter of 2025.

Excluding the impact of foreign currencies, organic net sales decreased 4.2% compared with the first quarter of 2025.

U.S. GAAP net earnings of $1.16 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 $1.24 per diluted share, an increase of 12% compared with the first quarter of 2025.

U.S. GAAP operating income of $336 million, or 9.5% of net sales.

Excluding $36 million of pretax expenses related to non-comparable items, adjusted operating income was $372 million, or 10.5% of net sales.

Net cash provided by operating activities of $152 million.

Free cash flow of $13 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 $3,533 million for the first quarter of 2026, an increase of approximately 1% compared with the first 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 first quarter of 2026 were $242 million, or $1.16 per diluted share, compared with net earnings of $157 million, or $0.72 per diluted share for the first quarter of 2025. Adjusted net earnings per diluted share for the first quarter of 2026 were $1.24, up approximately 12% from adjusted net earnings per diluted share of $1.11 for the first quarter of 2025. Adjusted net earnings for the first quarter of 2026 excluded net non-comparable items of $(0.08) per diluted share, while adjusted net

earnings for the first quarter of 2025 excluded net non-comparable items of $(0.39) 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 maintained its 2026 full year guidance. At the mid-point of its 2026 guidance, BorgWarner 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 $210 million in the Company's Battery Energy Systems segment, which represents approximately a 1.5% headwind to organic growth in 2026. Foreign currencies are expected to result in a year-over-year increase in sales of approximately $200 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 9.7% to 9.9% 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 $4.70 to $4.87 per diluted share. Excluding the impact of noncomparable items, adjusted net earnings are expected to increase and be in the range of $5.00 to $5.20 per diluted share. 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 first quarter 2026 results and guidance will be webcast at: https://www.borgwarner.com/investors. Additionally, an earnings call presentation will be available at https://www.borgwarner.com/investors.