BorgWarner Inc. (BWA), a leading auto parts supplier, saw its stock price surge 5.55% in premarket trading on Thursday, following the company's better-than-expected fourth-quarter results and an optimistic outlook for 2025.

The company reported adjusted earnings per share of $1.01 for the fourth quarter of 2024, surpassing analysts' consensus estimate of $0.96. Although revenue of $3.44 billion fell slightly short of expectations, it still represented a modest decline of 2.4% compared to the same period last year.

Despite facing headwinds such as lower industry production and currency fluctuations, BorgWarner's Q4 performance was bolstered by increased demand for its products and effective cost management strategies. The company also announced a quarterly dividend of $0.11 per share, reflecting confidence in its financial position.

For the full year 2025, BorgWarner expects its weighted light and commercial vehicle markets to decline by 1% to 3%. However, the company anticipates continued sales outgrowth, with organic sales projected to range from a 2% decline to a 2% increase. Additionally, BorgWarner forecasts an adjusted operating margin of 10% to 10.2% and strong free cash flow in the range of $650 million to $750 million.

The positive outlook is attributed to BorgWarner's strategic focus on sustainability and electrification, as the company accelerates its transition to eMobility solutions. The company secured multiple new business awards during the quarter, including contracts for variable cam timing systems, turbochargers, transfer cases, and electric motors, solidifying its position in the evolving automotive industry.