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BorgWarner Reports 2024 Financial Results

BorgWarner Inc. (NYSE: BWA) has released its comprehensive financial results for the fourth quarter and the full year of 2024, alongside its projections for 2025. Despite facing uncertainties in the automotive market, the company showcases resilience, reflecting its ability to adapt and expand.

Financial Performance Overview

For the fourth quarter of 2024, BorgWarner recorded net sales of $3,439 million, which represents a 2.4% decline compared to the same period in 2023. This decrease can be mainly attributed to reduced production in the industry, although BorgWarner’s innovative product offerings continued to attract customer interest and demand.

The overall performance for the full year also showed net sales of $14,086 million, a minor dip of 0.8% compared to 2023. However, the adjusted operating margin stood at 10.2% for Q4 and 10.1% for the full year, which denotes strong underlying operational efficiency.

Earnings and Losses

While the company reported a net loss of $(1.84) per diluted share in the fourth quarter, it is essential to note that this figure includes significant non-comparable charges totaling $646 million related to impairments in the PowerDrive Systems and Battery and Charging Systems divisions. Excluding these impacts, adjusted net earnings for the quarter were $1.01 per diluted share, an increase from $0.90 in Q4 of the previous year.

For the entirety of 2024, adjusted net earnings per diluted share climbed to $4.32 from $3.75 recorded in 2023, highlighting the company's improving profitability metrics beyond the direct impacts of business restructuring and asset impairment.

Looking Ahead: Guidance for 2025

BorgWarner remains optimistic for the upcoming year. The company anticipates net sales in the range of $13.4 billion to $14.0 billion for 2025, forecasting organic sales changes between down 2% to up 2% year-over-year. Despite the expectation of a slight decrease in the overall automotive market by 1% to 3%, BorgWarner is confident in its capability to achieve sales growth.

Significantly, the company projects its adjusted operating margin to be between 10.0% to 10.2%, demonstrating its commitment to maintaining a strong financial position. Additionally, BorgWarner anticipates free cash flow in the vicinity of $650 million to $750 million, which underscores its ability to generate cash even amid market fluctuations.

Strategic Developments

Further enhancing its growth trajectory, BorgWarner secured various new business awards aimed at expanding its market reach. Noteworthy initiatives include:

• - Variable Cam Timing (VCT) Systems for next-gen hybrid and gasoline engines with a major East Asian OEM, expected to launch in Q1 2026.
• - Four turbocharger programs for key North American vehicles, slated for rollout in 2026.
• - Two transfer case contracts with SAIC Maxus for export vehicles, showcasing strong international collaboration.
• - Awards for eMotors technology set to launch in 2025 and 2026 with leading Chinese manufacturers, marking a decisive move into the electric vehicle sector.

Conclusion

With a century-long legacy in automotive technology, BorgWarner continues to demonstrate adaptability amid industry challenges, making substantial investments in innovation and new projects. The company’s robust financial foundation enables it to navigate market complexities while driving forward in the transition to electrification and more sustainable mobility solutions. As they gear up for 2025, stakeholders will be keenly watching BorgWarner’s actual performance against its ambitious forecasts.