10-Q · May 6, 2026
BorgWarner reported Q1 2026 revenue of $3.53B, slightly exceeding estimates, with diluted EPS at $1.16, outperforming consensus expectations. The company continues to face challenges in its Battery Energy Systems…
Earnings analysis · 10-Q
BWA earnings analysis
Filed October 29, 2026 · Our reading of the company's report
The latest report
BorgWarner's Q3 results were mixed: revenue declined to $3.487 billion, GAAP EPS was $1.08 below consensus, and free cash flow fell to $195 million, but adjusted EPS of $1.39 exceeded estimates and adjusted operating…
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BorgWarner's Q3 results were mixed: revenue declined to $3.487 billion, GAAP EPS was $1.08 below consensus, and free cash flow fell to $195 million, but adjusted EPS of $1.39 exceeded estimates and adjusted operating margin reached 10.9%. Management raised 2026 adjusted EPS guidance to $5.20-$5.35 while narrowing revenue guidance to $14.0-$14.2 billion, producing a balanced outlook. The 10-Q reported no material changes to the company's 2025 Form 10-K risk factors.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $1.08
- Operating margin
- 8.7%
What stood out
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Revenue declined sequentially and year over year
Q3 revenue was $3.487 billion, down approximately 4.5% from $3.65 billion in Q2 2026 and 2.9% from $3.59 billion in Q3 2025.
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Operating margin remained above prior year
GAAP operating margin was 8.7%, down from 10.1% in Q2 2026 but up from 6.9% in Q3 2025. Adjusted operating margin was 10.9%.
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Adjusted EPS beat despite GAAP miss
Adjusted EPS was $1.39 versus the $1.25 consensus estimate, although GAAP EPS was $1.08 versus the $1.25 estimate.
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Positive free cash flow remained substantial
Free cash flow was $195 million, compared with $490 million in Q2 2026 and $250 million in Q3 2025, indicating lower quarterly cash conversion.
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Share repurchases supported capital returns
The company repurchased $175 million of common stock during Q3 and ended the period with $1.175 billion remaining under its authorization.
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Hedging position improved
The company reported a $43 million deferred gain in accumulated other comprehensive income from designated cash-flow and net-investment hedges at September 30, 2026, versus a $35 million deferred loss at December 31, 2025.
What to watch
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Revenue outlook was narrowed
Revenue guidance was narrowed to $14.0-$14.2 billion from $14.0-$14.3 billion, signaling a lower upper-end outlook despite the adjusted EPS increase to $5.20-$5.35.
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GAAP earnings and cash flow weakened
GAAP EPS of $1.08 was below the $1.25 estimate, and Q3 free cash flow of $195 million was down from $490 million in Q2, indicating earnings-quality and cash-conversion pressure.
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No formal risk-factor changes reported
Management stated that there were no material changes to the risk factors in the 2025 Form 10-K during the nine months ended September 30, 2026. Foreign-exchange exposure remains material, with the company reporting a $43 million deferred hedge gain at September 30, 2026 versus a $35 million deferred loss at December 31, 2025.
Management's outlook
2026 adjusted EPS guidance was raised to $5.20-$5.35 from $5.05-$5.30. Revenue guidance was narrowed to $14.0-$14.2 billion from $14.0-$14.3 billion, while free cash flow guidance was maintained at $900 million-$1.1 billion.
Earlier filings 4
10-K · February 11, 2026
BorgWarner reported stable full-year net sales of $14,316 million for 2025, up from $14,086 million in 2024, with eProducts revenue growing to approximately $2.6 billion (18% of sales) and PowerDrive Systems…
10-Q · May 7, 2025
BorgWarner reported revenue of $3,515 million for the quarter ended March 31, 2025, down versus $3,595 million a year earlier, with gross profit of $639 million and operating income of $237 million. Diluted EPS from…
10-Q · October 31, 2024
BorgWarner reported Q3 net sales of $3,449 million, down versus both the prior quarter and prior year, while GAAP diluted EPS improved to $1.04 driven by a much lower tax provision. Cash increased to $2,000 million and…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.