$BWA · BORGWARNER INC
BorgWarner reported Q3 2026 results: revenue of $3.487B (down 2.9% YoY), GAAP diluted EPS of $1.08, and adjusted EPS of $1.39, beating the $1.24 consensus. GAAP operating margin expanded 180 bps to 8.7%. The company raised full-year adjusted EPS guidance to $5.20–$5.35 (from $5.05–$5.30) and narrowed revenue guidance to $14.0B–$14.2B. BorgWarner also reduced gross debt by $864M and repurchased $175M in shares during the quarter.
- Adjusted EPS of $1.39 beat consensus of $1.24 by 12.1%, driven by lower tax rate and share repurchases.
- GAAP operating margin expanded 180 bps YoY to 8.7%; adjusted operating margin reached 10.9%.
- Revenue fell 2.9% YoY to $3.487B, with Battery Energy Systems segment plunging from $132M to $78M.
- Full-year adjusted EPS guidance raised to $5.20–$5.35 from prior $5.05–$5.30; revenue narrowed to $14.0B–$14.2B.
- Company reduced gross debt by $864M via tender/redemption and repurchased $175M in shares during Q3.
Markets closed — no regular-session reaction yet; extended-hours move not captured here. The raised guidance and $0.15 EPS beat on a $11.39B market-cap auto supplier should draw positive attention when trading opens.
BorgWarner beat on margins and raised guidance despite a declining production environment, while aggressively deleveraging ($864M debt reduction) and returning capital ($175M buyback) — a rare trifecta in the auto supplier space.
BorgWarner's margin expansion amid declining volumes contrasts with peers struggling in a down light-vehicle production environment. The $864M debt reduction and aggressive buyback signal balance-sheet confidence while pivoting toward eProducts and industrial/data-center markets.
Battery Energy Systems revenue collapsed 41% YoY ($132M to $78M), and full-year guidance embeds a ~$250M decline in that segment — a 1.7% organic growth headwind. Lower industry production and potential tariff impacts remain macro risks.