BorgWarner Gears Up to Report Q2 Earnings: What's in the Cards?

The Zacks Consensus Estimate for BWA's quarterly revenues implies a year-over-year decline of 1.5%. The company's earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 11.08%. This is depicted in the graph below:

Q1 Highlights

BorgWarner’s adjusted earnings of $1.24 per share in the first quarter of 2026 beat the Zacks Consensus Estimate of $1.16 by 6.83%. Revenues of $3.53 billion topped the Zacks Consensus Estimate of $3.47 billion by 1.74% and increased 0.5% year over year.

Things to Note

BorgWarner’s partnerships with FinDreams Battery and onsemi, along with the Eldor hybrid systems acquisition, continue to strengthen its electrified propulsion portfolio across batteries, power electronics, and ignition systems. Its battery energy storage systems are cell-chemistry and form-factor independent, allowing the company to expand beyond mobility into stationary and data center applications. 

Even though global vehicle production remains soft, BorgWarner still expanded its adjusted operating margin by 50 basis points to 10.5% in the first quarter of 2026 while adjusted EPS rose 12%, thanks to aggressive cost controls, operational discipline, and the exit from weaker charging businesses. The company expects full-year adjusted operating margin guidance in the range of 10.7-10.9% despite inflation and lower battery sales compared to 10.7% in 2025. 

Partnership with FinDreams Battery and onsemi, along with a resilient margin forecast for full-year 2026, are likely to have bolstered the company’s performance in the to-be-reported quarter. 

However, BorgWarner’s battery segment remains a major weak spot. The company expects battery sales to decline again in 2026 because of lower North American EV incentives and weaker European EV demand. The battery business alone represents a roughly 150-basis-point headwind to annual sales growth. Also, despite diversification efforts, over 80% of BorgWarner’s sales still come from the light vehicle market. The company expects weighted vehicle production to remain flat to down 3% in 2026.

Weakness in the battery segment and a decline in vehicle production are likely to have impacted BorgWarner’s performance in the second quarter.

Let’s have a look at our estimates for BWA’s segmental performance.

We expect Turbos & Thermal Technologies revenues to be $1.41 billion, suggesting a 5% year-over-year decline. For the Drivetrain & Morse Systems segment, we project sales of $1.46 billion, indicating a 2.4% year-over-year increase. We expect PowerDrive Systems sales to be $611 million, suggesting a rise of 5.2% year over year. For the Battery & Charging Systems segment, we project sales of $92.7 million, indicating a 41.7% year-over-year decline.

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for BorgWarner for the quarter to be reported, 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 +0.62%. This is because the Most Accurate Estimate is pegged higher than the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: It currently carries a Zacks Rank #4 (Sell). 

You can see the complete list of today’s Zacks #1 Rank stocks here.

Earnings Releases From Auto Space

General Motors Company GM reported second-quarter 2026 adjusted earnings of $3.57 per share, up 41.3% year over year. The figure beat the Zacks Consensus Estimate of $3.13 by 14.06%. Revenues increased 1.9% to $48.03 billion and surpassed the consensus estimate of $46.56 billion by 3.15%. Strong pricing, lower costs and disciplined incentives supported results. General Motors raised its full-year adjusted EBIT guidance to $14-$16 billion from $13.5-$15.5 billion. Adjusted earnings are now projected at $12-$14 per share, up from the prior range of $11.50-$13.50.

Tesla, Inc. TSLA reported second-quarter 2026 adjusted earnings of 33 cents per share, which declined 17.5% year over year. The figure missed the Zacks Consensus Estimate of 50 cents by 34%. Revenues advanced 25.5% to $28.24 billion and surpassed the consensus estimate of $25.81 billion by 9.41%. Tesla expects 2026 capital expenditures to exceed $25 billion and rise further over the next two to three years. 

Genuine Parts Company GPC reported second-quarter 2026 adjusted earnings of $2.15 per share, beating the Zacks Consensus Estimate of $2.10 by 2.38%. The bottom line increased 2.4% from $2.10 in the year-ago quarter. Revenues rose 6% year over year to $6.54 billion and surpassed the consensus estimate of $6.39 billion by 2.36%. Genuine Parts reaffirmed its 2026 adjusted earnings guidance of $7.50-$8 per share and total sales growth outlook of 3-5.5%. Genuine Parts ended June with $2.3 billion of liquidity, including $559 million in cash.

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This article originally published on Zacks Investment Research (zacks.com).

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