BorgWarner (BWA) Q2 2026 earnings summary

Executive summary

• Q2 2026 net sales were $3.65 billion, flat to up 0.3% year-over-year, with organic net sales modestly ahead of market excluding battery sales decline and gross margin improving to 19.8% from 17.6%.

• Adjusted EPS increased 17.4% year-over-year to $1.42, supported by cost controls and share repurchases.

• Seven new business awards were secured across foundational, hybrid, electric, and drivetrain technologies, with launches from 2026 to 2029.

• Exited charging business and consolidated North American battery systems, targeting a more focused portfolio and $50 million in annualized cost savings.

• Share repurchase authorization increased by $1 billion to $1.35 billion, reflecting strong liquidity and commitment to shareholder value.

Financial highlights

• Adjusted operating income for Q2 2026 was $413 million (11.3% margin), up from $373 million (10.3%) a year ago.

• Adjusted EPS was $1.42, up from $1.21 in Q2 2025; GAAP EPS was $1.34, up from $1.03.

• Free cash flow for Q2 2026 was $492 million.

• Gross margin for Q2 2026 was 19.8%, up from 17.6% last year.

• $250 million was used for share repurchases and $69–$70 million for dividends in the first half.

Outlook and guidance

• Full-year 2026 net sales guidance is $14.0–$14.3 billion, with organic sales expected to decline 1.5%–3.5% year-over-year.

• Adjusted operating margin guidance is 10.7%–10.9%.

• Adjusted EPS guidance raised to $5.05–$5.30 per share.

• Free cash flow expected in the range of $900 million–$1.1 billion.

• Battery Energy Systems segment sales expected to decline by $250 million, a 1.7% headwind to organic growth.