BorgWarner Inc. (NYSE:BWA) released its third quarter 2026 earnings on October 29, 2026, reporting net sales of $3,487 million, a U.S. GAAP operating margin of 8.7%, and a $864 million reduction in gross debt through a debt tender and make-whole redemption.

Key Highlights

  • Net sales of $3,487 million for Q3 2026, a decrease of approximately 2.9% compared with Q3 2025, according to the filing.
  • U.S. GAAP net earnings per diluted share of $1.08, an increase of 47.9% compared with $0.73 per diluted share in Q3 2025.
  • Adjusted net earnings of $1.39 per diluted share for Q3 2026, up 12.1% from $1.24 in Q3 2025.
  • Gross debt reduced by $864 million via a debt tender and make-whole redemption completed during the quarter.
  • Approximately $175 million of shares repurchased and a $35 million cash dividend paid to shareholders in Q3 2026.
  • Full year 2026 adjusted EPS guidance raised to a range of $5.20 to $5.35 per diluted share, from a prior range of $5.05 to $5.30.
  • Free cash flow of $195 million in Q3 2026, with full year free cash flow guidance of $900 million to $1,100 million.

BorgWarner's Q3 2026 Financial Results and Updated Full Year Outlook

According to the filing, BorgWarner reported U.S. GAAP operating income of $302 million, representing 8.7% of net sales for the third quarter of 2026, which the company disclosed as an increase of 180 basis points compared with the third quarter of 2025. Excluding $79 million of pretax expenses related to non-comparable items, adjusted operating income was $381 million, or 10.9% of net sales, an increase of 20 basis points year over year. The company attributed the year-over-year improvement in adjusted net earnings per diluted share primarily to "a lower full year effective tax rate and the impact of a lower share count resulting from share repurchases in 2025 and 2026."

The filing noted that the decrease in net sales was "primarily driven by declining market production volumes and lower Battery Energy Systems segment sales." Organic net sales, excluding the impact of foreign currencies, decreased 3.1% compared with Q3 2025. Net cash provided by operating activities was $320 million for the quarter. The company also disclosed multiple new business awards across its portfolio, including an engine control module award with a global OEM for a new internal combustion engine pickup truck platform with production expected in 2029, three turbocharger conquest awards for light vehicle gasoline platforms, and several eMotor awards with OEMs in China.

For full year 2026, the company disclosed that net sales guidance was narrowed to a range of $14.0 billion to $14.2 billion, compared with a previous forecast of $14.0 billion to $14.3 billion, citing "lower industry production expectations at the high-end of the Company's previous guidance." The company expects its weighted light vehicle market to be down 2% to down 1%. U.S. GAAP net earnings are expected in the range of $4.65 to $4.84 per diluted share, and full year operating cash flow is expected in the range of $1,600 million to $1,700 million. The filing noted that the full year 2026 guidance includes forward-looking statements based on management's current outlook and subject to the company's cautionary language.

What Was Disclosed

BorgWarner's Q3 2026 earnings release reported quarterly net sales of $3,487 million, a $864 million gross debt reduction, share repurchases of approximately $175 million, and raised full year adjusted EPS guidance to $5.20 to $5.35 per diluted share.