BorgWarner Inc. (NYSE:BWA) shares rose 2.5% in premarket trading Thursday after the auto parts manufacturer reported stronger-than-expected third-quarter earnings and raised its full-year guidance, despite revenue landing just shy of forecasts.
The company posted adjusted earnings of $1.24 per share, topping analyst estimates of $1.17 and up 14% year-over-year. Revenue climbed 4.1% to $3.59 billion, slightly below the consensus estimate of $3.61 billion, while organic sales increased 2.1%, supported by higher vehicle production and steady growth in electric product sales.
Adjusted operating margin expanded to 10.7%, up 60 basis points from a year earlier, even after absorbing a 60-basis-point headwind from tariffs. During the quarter, BorgWarner returned $136 million to shareholders, including $100 million in share buybacks 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 upbeat quarter, the company raised its full-year 2025 guidance, now projecting:
- Net sales between $14.1 billion and $14.3 billion
- Adjusted operating margin between 10.3% and 10.5%
- Adjusted EPS in the range of $4.60 to $4.75
BorgWarner also lifted its free cash flow forecast by $150 million to a range of $850 million–$950 million, reflecting improved operational execution.
The upgraded outlook comes despite persistent headwinds, including production interruptions among customers in North America and Europe. Still, BorgWarner now expects its weighted light and commercial vehicle markets to perform between down 1% and flat for 2025, an improvement from its earlier expectations.