BorgWarner H1 Net Sales Slightly Decline, Q2 Slightly Increase, Raises Full-Year Outlook

On July 31, American auto parts supplier BorgWarner announced that in the first half of this year, its net sales decreased by 0.6% to $7.153 billion from $7.198 billion in the same period last year. Operating income was $526 million, lower than $592 million in the same period last year. Gross profit was $1.279 billion, down from $1.329 billion in the same period last year. The gross profit margin was 17.9%, lower than 18.5% in the same period last year. Adjusted diluted earnings per share were $2.32, higher than $2.22 in the same period last year.

Image source: BorgWarner

In the second quarter of this year, its net sales increased by 0.97% year-on-year from $3.603 billion to $3.638 billion, exceeding analysts’ previous expectations of $3.61 billion. Operating profit was $289 million, down from $297 million in the same period last year. Gross profit was $640 million, lower than $685 million in the same period last year. Gross margin reached 17.6%, down from 19.0% in the same period last year. Adjusted diluted earnings per share were $1.21, higher than $1.19 in the same period last year and also above the expected $1.08.

BorgWarner raised its 2025 net sales forecast, mainly due to increased automotive production and favorable exchange rate factors, causing its stock price to rise more than 2% in pre-market trading.

Currently, BorgWarner expects its full-year 2025 net sales to be between $14.0 billion and $14.4 billion, higher than the previous forecast of $13.6 billion to $14.2 billion; operating profit to be between $1.167 billion and $1.217 billion; operating profit margin to be between 8.3% and 8.5%; adjusted operating profit to be between $1.42 billion and $1.48 billion; adjusted operating profit margin to be between 10.1% and 10.3%, compared to the previous forecast of 9.6% to 10.2%; adjusted diluted earnings per share to be between $4.45 and $4.65, higher than the previous forecast of $4.00 to $4.45; operating cash flow to be between $1.368 billion and $1.418 billion; and free cash flow to be between $700 million and $800 million, an increase of $50 million from the previous forecast.

Although tariffs targeting automakers force auto parts suppliers to bear more costs, BorgWarner will benefit as automakers increase production and market demand for efficient hybrid systems and turbochargers remains strong.