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AUBURN HILLS - On Thursday, BorgWarner Inc. (NYSE:BWA) reported better-than-expected third quarter earnings and raised its full-year guidance, despite slightly missing revenue estimates.
The auto parts maker’s shares rose 2.5% in pre-market trading after the release.
The company posted adjusted earnings per share of $1.24 for the third quarter, exceeding analyst expectations of $1.17 and representing a 14% increase from the same period last year. Revenue rose 4.1% to $3.59 billion, just below the consensus estimate of $3.61 billion. Organic sales growth was 2.1% YoY, driven primarily by higher market production volumes and light vehicle electric product sales growth.
BorgWarner’s adjusted operating margin improved to 10.7%, up 60 basis points from the third quarter of 2024, despite facing a 60 basis point headwind from tariffs. The company returned $136 million to stockholders during the quarter through $100 million in share repurchases and $36 million in dividends.
"Our solid conversion on higher sales and focus on cost controls allowed us to deliver strong performance despite a net headwind from tariffs," said BorgWarner’s CEO in the earnings release.
Following the strong results, BorgWarner raised its 2025 full-year guidance, now expecting net sales between $14.1 billion and $14.3 billion, adjusted operating margin of 10.3% to 10.5%, and adjusted EPS of $4.60 to $4.75. The company also increased its free cash flow guidance by $150 million to a range of $850 million to $950 million.
The improved outlook comes despite challenges including customer production disruptions in North America and Europe. BorgWarner now expects its weighted light and commercial vehicle markets to be between down 1% and flat for 2025, an improvement from its previous forecast.
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