Revenue benefitted from higher demand for products and recoveries from its customers of material cost inflation. Organic revenue grew 20.7% Y/Y in the quarter.

Gross profit rose to $868 million from $712 million; gross margin expanded to 19.2% from 18.9% a year ago.

Adjusted operating income stood at $369 million vs. $258 million a year ago, with the margin expanding to 10.1% from 8.5% a year ago.

Adjusted EPS of $1.35, beating the analyst consensus of $1.14.

The company held cash and equivalents of $848 million as of June 30, 2023. 

Outlook: BorgWarner has updated its full-year guidance to reflect its continuing operations. Starting Q3, the company will no longer consolidate its Fuel Systems and Aftermarket segments, and the results of those segments for all periods before the PHINIA spin-off will be reflected as discontinued operations. 

BWA revises FY23 sales outlook to $14.2 billion-$14.6 billion on a continuing operations basis. The company currently expects FY23 adjusted EPS from continuing operations of $3.50-$3.85.

Price Action: BWA shares are trading lower by 2.40% at $45.35 on the last check Wednesday.