BorgWarner reported lower third-quarter sales but higher earnings and operating margins, citing cost controls that helped offset weaker industry production. The auto supplier also raised its 2026 adjusted earnings-per-share guidance, reduced gross debt and announced nine new business awards spanning combustion-engine and electrified-vehicle products.
Key details
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Sales declined, while earnings and margins improved. Third-quarter sales were $3.487 billion, down 2.9% from a year earlier; excluding currency effects, organic sales fell 3.1%. GAAP operating income was $302 million, equal to an 8.7% margin, up 180 basis points year over year. Adjusted operating income was $381 million, or a 10.9% margin, up 20 basis points.
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Adjusted earnings rose more modestly than GAAP earnings. GAAP diluted earnings were $1.08 per share, up 47.9%. Excluding 31 cents per share of losses tied to non-comparable items, adjusted diluted earnings were $1.39 per share, up 12.1%.
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The company raised its 2026 adjusted EPS guidance. The announcement provided here does not state the revised guidance range.
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BorgWarner lowered debt and returned capital to shareholders. A debt tender and make-whole redemption reduced gross debt by $864 million during the quarter. The company also repurchased about $175 million of shares and paid $35 million in cash dividends.
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Nine new awards span both established and electrified products:
- One engine control module award supports a global automaker’s new internal-combustion pickup platform, with production expected to start in 2029.
- Three turbocharger awards cover gasoline-powered light vehicles in South America and Europe, with production expected to begin in 2027.
- One award with a major Chinese automaker is BorgWarner’s first aluminum-wire eMotor program. It covers generator and traction motors for auxiliary-drive applications in hybrid vehicles, with production expected to begin in 2026.
- Three eMotor awards with leading Chinese automakers cover range-extended, battery-electric and hybrid vehicles, with production expected to start between 2027 and 2028.
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One high-voltage inverter award is for a global automaker’s next-generation battery-electric vehicle programs and extends an existing customer relationship.
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BorgWarner also pointed to growing activity beyond its core automotive markets. It said it had advanced product readiness for data-center and industrial applications and accelerated quoting activity for industrial solutions.
The quarter combined a decline in sales with stronger reported profitability: GAAP operating margin improved substantially, while adjusted margin rose more modestly. The debt reduction and shareholder returns were separate uses of capital during the same period.