BorgWarner (BWA) Q4 2024 earnings summary

Executive summary

• 2024 net sales were $14.1B, flat to slightly down year-over-year, with sales outgrowth of 2.8% and strong demand for efficient propulsion products and new program awards supporting long-term growth.

• Adjusted operating margin exceeded 10%, above guidance, driven by cost control and operational discipline.

• Adjusted EPS grew 15% year-over-year to $4.32; free cash flow reached $729M, up 29% year-over-year and above guidance.

• Leadership transition announced, with a new CEO emphasizing continued focus on profitable growth and innovation.

• Multiple new business awards in hybrid, gasoline, and electric vehicle platforms, supporting long-term growth.

Financial highlights

• FY 2024 net sales were $14.1B, down 0.2% year-over-year; Q4 net sales were $3.44B, down 1.6% year-over-year.

• Adjusted operating margin was 10.1% for 2024 and 10.2% for Q4; adjusted operating income was $1.42B for the year and $352M for Q4.

• Adjusted EPS for 2024 was $4.32; Q4 adjusted EPS was $1.01, up from $0.90 in Q4 2023.

• Free cash flow for 2024 was $729M; Q4 free cash flow was $539M.

• Recorded $646M in goodwill and fixed asset impairment charges in Q4, primarily due to delayed BEV adoption.

Outlook and guidance

• 2025 net sales expected between $13.4B and $14.0B, with a $410M FX headwind assumed and organic growth of -2% to +2%.

• Adjusted operating margin guidance for 2025 is 10.0%–10.2%; adjusted EPS expected at $4.05–$4.40 per share.

• Free cash flow guidance for 2025 is $650M–$750M, with the midpoint below 2024 due to FX headwinds.

• CapEx planned at $625M–$675M; adjusted tax rate expected at 23%–24%.

• Global industry production expected to decline 1%–3% in 2025; company expects to outperform market by 100–300 basis points.