BorgWarner BWA reported adjusted earnings of $1.11 per share for the first quarter of 2025, which surpassed the Zacks Consensus Estimate of 98 cents and increased from $1.03 recorded in the prior-year quarter. Better-than-expected adjusted operating income from the Turbos & Thermal Technologies unit drove the outperformance.
The automotive equipment supplier reported net sales of $3.52 billion, which topped the Zacks Consensus Estimate of $3.39 billion. The top line, however, declined 2% year over year.
BorgWarner Inc. Price, Consensus and EPS Surprise
BorgWarner Inc. price-consensus-eps-surprise-chart | BorgWarner Inc. Quote
BWA’s Segmental Performance
Turbos & Thermal Technologies: Net sales totaled $1.45 billion in the reported quarter. Down from $1.57 billion in the year-ago period. The figure also missed the Zacks Consensus Estimate of $1.49 billion. Adjusted operating income of $235 million increased from $228 million recorded in the year-ago quarter and beat the Zacks Consensus Estimate of $222.7 million.
Drivetrain & Morse Systems: Net sales totaled $1.36 billion in the reported quarter, down from $1.42 billion in the year-ago period. The figure also missed the Zacks Consensus Estimate of $1.37 billion. Adjusted operating income of $243 million decreased from $253 million recorded in the year-ago period and missed the Zacks Consensus Estimate of $247.9 million.
PowerDrive Systems: Sales from the segment were $561 million, which rose from $436 million a year ago. The figure also beat the Zacks Consensus Estimate of $396 million. The segment incurred an adjusted operating loss of $43 million, narrower than an operating loss of $62 million in the corresponding period of 2024 but wider than the Zacks Consensus Estimate of a loss of $30.8 million.
Battery & Charging Systems: Sales from the segment were $150 million, which decreased from $177 million a year ago. The figure also missed the Zacks Consensus Estimate of $234.5 million. The segment incurred an adjusted operating loss of $22 million, wider than an operating loss of $15 million in the corresponding period of 2024 and the Zacks Consensus Estimate of a loss of $15.5 million.
(Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
Financial Position of BorgWarner
As of March 31, 2025, BorgWarner had $1.70 billion in cash/cash equivalents/restricted cash compared with $2.09 billion as of Dec. 31, 2024. As of the end of first-quarter 2025, long-term debt was $3.80 billion, up from $3.76 billion recorded as of Dec. 31, 2024.
Net cash provided by the operating activities from continuing operations was $82 million in the quarter compared with net cash used in operating activities from continuing operations of $118 million in the corresponding quarter of 2024. Capital expenditures totaled $119 million, while negative free cash flow totaled $35 million.
BWA Revises 2025 Guidance
For full-year 2025, the company now anticipates net sales in the band of $13.6-$14.2 billion compared with the previous estimate of $13.4-$14 billion.
Adjusted operating margin is expected in the band of 9.6-10.2% compared with the previous guidance of 9.1-9.2%. Adjusted earnings per share are estimated in the range of $4-$4.45 compared with the previous estimate of $4.05-$4.40. The operating cash flow is forecasted in the range of $1,323- $1,375 million compared with the prior projected range of $1,325-$1,375 million. Free cash flow is projected in the band of $650-$750 million.
BorgWarner’s Zacks Rank & Key Picks
BWA carries a Zacks Rank #4 (Sell) at present.
Some better-ranked stocks in the auto space are Hesai Group HSAI and Standard Motor Products, Inc. SMP. HSAI sports a Zacks Rank #1 (Strong Buy), while SMP carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for HSAI’s 2025 earnings indicates year-over-year growth of 336.36%, respectively. EPS estimates for 2026 have improved 12 cents in the past 30 days.
The Zacks Consensus Estimate for SMP’s 2025 sales and earnings implies year-over-year growth of 17.1% and 12.62%, respectively. EPS estimates for 2025 and 2026 have improved 6 cents and a penny, respectively, in the past seven days.
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This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
