BorgWarner Reports $3.515 Billion in Q1 2025 Sales, Faces Currency Impact

BorgWarner Inc. reported a net sales figure of $3.515 billion for the first quarter of 2025, reflecting a decrease of $80 million, or 2%, compared to $3.595 billion in the same period of 2024. The decline in sales was primarily attributed to fluctuations in foreign currencies, which resulted in an estimated $85 million decrease, mainly due to the weakening of the Euro, Korean Won, and Brazilian Real against the U.S. Dollar. Despite this, the company experienced a slight increase in sales volume and mix, particularly in its eProducts segment, which saw revenue rise to $637 million, up from $506 million year-over-year.

In terms of profitability, BorgWarner's operating income fell to $237 million from $295 million in the prior year, with net earnings from continuing operations decreasing to $171 million, down from $221 million. The company's gross profit margin improved slightly to 18.2% from 17.9%, despite total cost of sales also decreasing to $2.876 billion from $2.951 billion. The company incurred $31 million in restructuring expenses, up from $19 million in the previous year, primarily related to employee termination benefits and costs associated with exiting its charging business.

Strategically, BorgWarner has made significant organizational changes, including the decision to exit its charging business within the Battery & Charging Systems segment, which is expected to be completed by the second quarter of 2025. This move is anticipated to eliminate approximately $30 million in annualized adjusted operating losses by 2026. Additionally, the company has consolidated its North American battery systems business to align its cost structure with current market dynamics, aiming for annual cost savings of around $20 million by 2026.

Operationally, BorgWarner's total assets decreased to $13.830 billion as of March 31, 2025, down from $13.993 billion at the end of 2024. The company reported a cash balance of $1.707 billion, a decrease from $2.094 billion, while total liabilities also fell to $7.940 billion from $8.287 billion. The company’s employee headcount remained stable, and it continues to focus on enhancing its product portfolio through organic investments and strategic acquisitions, particularly in the electric vehicle sector.

Looking ahead, BorgWarner anticipates a challenging year, projecting a decrease in global industry production in 2025. However, the company expects to mitigate the impact through net new business-related sales growth and cost recovery actions, forecasting sales to be flat to down modestly, excluding foreign currency impacts. The company maintains a positive long-term outlook, driven by trends such as the adoption of electrified vehicle technologies and stringent global emissions standards.