We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
BorgWarner Gears Up to Report Q1 Earnings: What's in the Cards?
Read MoreHide Full Article
Key Takeaways
BorgWarner is set to report Q1 2026 earnings on May 6, with EPS seen at $1.16 and revenues at $3.47B.
BWA gains in China and EV partnerships may support results despite battery unit underperformance.
BorgWarner expects 2026 sales and free cash flow declines, with investment plans pressuring near-term cash.
BorgWarner Inc. (BWA - Free Report) is slated to release first-quarter 2026 results on May 6, before market open. The Zacks Consensus Estimate for the to-be-reported quarter’s EPS and revenues is pegged at $1.16 per share and $3.47 billion, respectively.
For the first quarter, the consensus estimate for BWA’s earnings per share has moved down 3 cents in the past 90 days. Its bottom-line estimates imply a rise of 4.50% from the year-ago reported number.
The Zacks Consensus Estimate for revenues suggests a year-over-year decline of 1.2%.
BWA surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 12.68%. This is depicted in the graph below:
BorgWarner reported adjusted earnings of $1.35 per share for the fourth quarter of 2025, which surpassed the Zacks Consensus Estimate of $1.16 and increased from $1.01 recorded in the prior-year quarter. The automotive equipment supplier reported net sales of $3.57 billion, up 3.9% year over year. The figure also topped the Zacks Consensus Estimate of $3.51 billion.
Things to Note
BorgWarner is gaining momentum in China, where hybrid and lower-cost EV demand is expanding. The company won its first 48-volt electric cross differential award with a leading Chinese OEM. Hybrids now account for about half of the company’s electrified sales. This diversified exposure across ICE, hybrid, and EV platforms enables BorgWarner to capture global powertrain transition tailwinds more evenly than peers focused solely on BEVs.
Collaborations with FinDreams Battery, Shaanxi Fast Auto Drive Group and onsemi are strengthening its EV supply chain and power electronics capabilities. Meanwhile, the acquisition of Eldor Corporation’s Electric Hybrid Systems business enhances its high-voltage technology portfolio, supporting long-term growth in hybrid and electric propulsion systems.
Momentum in China and strategic collaborations are likely to have supported BorgWarner’s performance in the first quarter of 2026.
However, BorgWarner’s Battery & Charging Systems segment continues to underperform, primarily due to challenges in North America, with softer demand in Europe also contributing to a lesser extent. As a result, the business is expected to create an approximately 150-basis-point headwind to growth in 2026. Based on these assumptions, 2026 organic sales are projected to decline between 1.5% and 3.5% year over year. The company projects total 2026 sales in the range of $14-$14.3 billion, down from $14.32 billion in 2025.
The company plans to increase its capital spending to support the upcoming turbine generator system launch and other light vehicle launches around the globe. While the increase in investments is expected to accelerate its top-line growth in 2027 and beyond, it will put pressure on the company’s near-term cash flow. The company expects full-year 2026 free cash flow in the range of $900 million to $1.1 billion, down from $1.21 billion in 2025.
The expected decline in 2026 sales and free cash flows is likely to have impacted the company’s performance in the first quarter.
Let’s see what our model estimates say about the expected first-quarter revenues and adjusted operating income performance of each segment.
Our estimate for Turbos & Thermal Technologies revenues is pegged at $1.45 billion, suggesting a year-over-year decline of 0.5%. We expect revenues from Drivetrain & Morse Systems to be $1.32 billion, suggesting a year-over-year decline of 2.9%. Our estimate for PowerDrive Systems' revenues is pegged at $596 million, indicating a year-over-year rise of 6.2%. We expect revenues from the Battery & Charging Systems segment to be $102.5 million, suggesting a year-over-year decline of 31.7%.
Our estimate for adjusted operating income from the Turbos & Thermal Technologies segment is pegged at $220.1 million, representing a year-over-year decline of 6.3%. We expect adjusted operating income from Drivetrain & Morse Systems to be $230 million, suggesting a year-over-year decline of 5.4%. Our estimate for adjusted operating loss from the PowerDrive Systems segment is pegged at $22.1 million compared with the loss of $43 million incurred in the first quarter of 2025. We expect adjusted operating loss from the Battery & Charging Systems segment to be $6.7 million compared with the loss of $22 million incurred in the first quarter of 2025.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for BorgWarner this time around, as it does not have the right combination of the two key ingredients. A positive Earnings ESP, combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), increases the odds of an earnings beat. This is not the case here.
Earnings ESP: BWA has an Earnings ESP of -0.27%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: BorgWarner currently carries a Zacks Rank #3.
The Zacks Consensus Estimate for earnings is pegged at 37 cents per share.
ADNT surpassed earnings estimates in two of the trailing four quarters and missed twice, the average surprise being 39.24%.
AutoZone, Inc. (AZO - Free Report) has an Earnings ESP of 0.00% and a Zacks Rank #3 at present. It is scheduled to post third-quarter fiscal 2026 earnings on May 26. The Zacks Consensus Estimate for earnings is pegged at $36.09 per share.
AZO beat earnings estimates in one of the trailing four quarters and missed thrice, the average negative surprise being 2.30%.
Zacks' 7 Best Strong Buy Stocks (New Research Report)
Valued at $99, click below to receive our just-released report
predicting the 7 stocks that will soar highest in the coming month.
View the Zacks #1 Rank List
Image: Bigstock
BorgWarner Gears Up to Report Q1 Earnings: What's in the Cards?
Key Takeaways
BorgWarner Inc. (BWA - Free Report) is slated to release first-quarter 2026 results on May 6, before market open. The Zacks Consensus Estimate for the to-be-reported quarter’s EPS and revenues is pegged at $1.16 per share and $3.47 billion, respectively.
For the first quarter, the consensus estimate for BWA’s earnings per share has moved down 3 cents in the past 90 days. Its bottom-line estimates imply a rise of 4.50% from the year-ago reported number.
The Zacks Consensus Estimate for revenues suggests a year-over-year decline of 1.2%.
BWA surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 12.68%. This is depicted in the graph below:
BorgWarner Inc. Price and EPS Surprise
BorgWarner Inc. price-eps-surprise | BorgWarner Inc. Quote
Q4 Highlights
BorgWarner reported adjusted earnings of $1.35 per share for the fourth quarter of 2025, which surpassed the Zacks Consensus Estimate of $1.16 and increased from $1.01 recorded in the prior-year quarter. The automotive equipment supplier reported net sales of $3.57 billion, up 3.9% year over year. The figure also topped the Zacks Consensus Estimate of $3.51 billion.
Things to Note
BorgWarner is gaining momentum in China, where hybrid and lower-cost EV demand is expanding. The company won its first 48-volt electric cross differential award with a leading Chinese OEM. Hybrids now account for about half of the company’s electrified sales. This diversified exposure across ICE, hybrid, and EV platforms enables BorgWarner to capture global powertrain transition tailwinds more evenly than peers focused solely on BEVs.
Collaborations with FinDreams Battery, Shaanxi Fast Auto Drive Group and onsemi are strengthening its EV supply chain and power electronics capabilities. Meanwhile, the acquisition of Eldor Corporation’s Electric Hybrid Systems business enhances its high-voltage technology portfolio, supporting long-term growth in hybrid and electric propulsion systems.
Momentum in China and strategic collaborations are likely to have supported BorgWarner’s performance in the first quarter of 2026.
However, BorgWarner’s Battery & Charging Systems segment continues to underperform, primarily due to challenges in North America, with softer demand in Europe also contributing to a lesser extent. As a result, the business is expected to create an approximately 150-basis-point headwind to growth in 2026. Based on these assumptions, 2026 organic sales are projected to decline between 1.5% and 3.5% year over year. The company projects total 2026 sales in the range of $14-$14.3 billion, down from $14.32 billion in 2025.
The company plans to increase its capital spending to support the upcoming turbine generator system launch and other light vehicle launches around the globe. While the increase in investments is expected to accelerate its top-line growth in 2027 and beyond, it will put pressure on the company’s near-term cash flow. The company expects full-year 2026 free cash flow in the range of $900 million to $1.1 billion, down from $1.21 billion in 2025.
The expected decline in 2026 sales and free cash flows is likely to have impacted the company’s performance in the first quarter.
Let’s see what our model estimates say about the expected first-quarter revenues and adjusted operating income performance of each segment.
Our estimate for Turbos & Thermal Technologies revenues is pegged at $1.45 billion, suggesting a year-over-year decline of 0.5%. We expect revenues from Drivetrain & Morse Systems to be $1.32 billion, suggesting a year-over-year decline of 2.9%. Our estimate for PowerDrive Systems' revenues is pegged at $596 million, indicating a year-over-year rise of 6.2%. We expect revenues from the Battery & Charging Systems segment to be $102.5 million, suggesting a year-over-year decline of 31.7%.
Our estimate for adjusted operating income from the Turbos & Thermal Technologies segment is pegged at $220.1 million, representing a year-over-year decline of 6.3%. We expect adjusted operating income from Drivetrain & Morse Systems to be $230 million, suggesting a year-over-year decline of 5.4%. Our estimate for adjusted operating loss from the PowerDrive Systems segment is pegged at $22.1 million compared with the loss of $43 million incurred in the first quarter of 2025. We expect adjusted operating loss from the Battery & Charging Systems segment to be $6.7 million compared with the loss of $22 million incurred in the first quarter of 2025.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for BorgWarner this time around, as it does not have the right combination of the two key ingredients. A positive Earnings ESP, combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), increases the odds of an earnings beat. This is not the case here.
Earnings ESP: BWA has an Earnings ESP of -0.27%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: BorgWarner currently carries a Zacks Rank #3.
Earnings Whispers for Other Auto Stocks
Adient plc (ADNT - Free Report) has an Earnings ESP of +2.11% and a Zacks Rank #4 (Sell) at present. It is scheduled to post second-quarter fiscal 2026 earnings on May 6. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for earnings is pegged at 37 cents per share.
ADNT surpassed earnings estimates in two of the trailing four quarters and missed twice, the average surprise being 39.24%.
AutoZone, Inc. (AZO - Free Report) has an Earnings ESP of 0.00% and a Zacks Rank #3 at present. It is scheduled to post third-quarter fiscal 2026 earnings on May 26. The Zacks Consensus Estimate for earnings is pegged at $36.09 per share.
AZO beat earnings estimates in one of the trailing four quarters and missed thrice, the average negative surprise being 2.30%.