Adjusted EPS increased by $0.02 year-over-year, aided by share repurchases.
Adjusted operating income was $373 million, slightly down $8 million on a comparable basis due to $31 million lower sales but offset by cost controls and tariff management.
Adjusted operating margin was strong at 10.3%, despite a 40 basis point tariff headwind, marking the fifth consecutive quarter with margin at or above 10%.
BorgWarner reported second quarter 2025 sales of just over $3.6 billion, relatively flat year-over-year excluding foreign exchange, in line with market production.
Free cash flow was $507 million, a 71% increase from the prior year, driven by strong working capital and capital expenditure performance.
Light vehicle eProduct sales increased 31% year-over-year, driven by strong growth in Europe and Asia.
The company returned over $130 million to shareholders in the quarter through dividends and share repurchases.
Cash and cash equivalents increased to $190.4 million, debt was $374.5 million, and inventory decreased by $32.2 million compared to March 31, 2025.
Gross margin was 46.7%, consistent with the prior year quarter despite higher input and labor costs, with North America gross margin at 49.7% and Europe at 36.2%.
Net income totaled $103.5 million or $2.47 per fully diluted share, compared to $97.8 million or $2.31 per share last year.
Net sales for Q2 2025 were $631.1 million, up 5.7% year-over-year, with North America net sales increasing 6.4% to $492.7 million and Europe net sales increasing 2.7% to $133.4 million.
Operating expenses increased 6.5% to $154.4 million, driven by higher personnel costs, variable compensation, and software/hardware costs.
Operating margin was 22.2%, flat with the prior year, and consolidated adjusted EBITDA increased 4.8% to $159.6 million, with a margin of 25.3%.
Strong cash flow from operations of $124.7 million enabled capital expenditures of $39.9 million, dividends of $11.8 million, and $35 million in share repurchases.
Volumes were relatively flat year-on-year, with North American volumes exceeding U.S. housing starts by approximately 240 basis points over the last 12 months.
Aerojet Rocketdyne delivered its highest revenue quarter on record with a 2.0 book-to-bill.
Free cash flow was $574 million, driven by increased operating income and improved working capital performance.
L3Harris reported record $8.3 billion in orders for Q2 2025, resulting in a 1.5 book-to-bill ratio.
Non-GAAP EPS was $2.78, up 16% year-over-year; pension-adjusted EPS was $2.42, up 22% year-over-year.
Revenue was $5.4 billion, reflecting strong organic growth of 6%.
Segment operating margin was 15.9%, up 30 basis points, marking the seventh consecutive quarter of year-over-year margin expansion.
Segment results included CS revenue up 2% with 24.4% margin, IMS revenue up 6% organically with 13.2% margin, SAS revenue up 7% organically with 12.3% margin, and Aerojet Rocketdyne with 12% organic growth and 13.3% margin.
Adjusted EBITDA was $30.8 million with a margin of 13%.
Backlog increased 23% year-over-year to $360 million, led by longer-cycle project orders offsetting short-cycle softness.
Free cash flow was negative $21.4 million due to working capital seasonality, acquisition payments, higher taxes, and tariff payments.
GAAP loss per share was $0.07; adjusted EPS was $0.50, down $0.12 year-over-year mainly due to tariffs.
Gross margin was 32.7% GAAP and 34.3% adjusted, with adjusted gross margin contracting 370 basis points year-over-year due to tariffs, volume, and mix.
Operating income was $5.5 million GAAP and $18.5 million adjusted, with adjusted operating margin of 7.8%.
Orders grew 2% year-over-year to $259 million, driven by 8% growth in project-related orders and strength in EMEA.
Sales were down 2% year-over-year to $235.9 million, with a 3% decline in short-cycle sales and unchanged project-related sales.
SG&A expenses increased on a GAAP basis due to acquisition and realignment costs but adjusted SG&A decreased 5% excluding these items.
Short-cycle orders declined 4% due to tariff impacts and market digestion of price increases.
Tariffs negatively impacted gross profit by $4.2 million and gross margin by 180 basis points in Q1.
Dafinchi
