Garrett Motion Inc. reported fourth‑quarter 2025 results that beat expectations on both revenue and earnings. Net sales rose 6% to $891 million, driven by higher demand for diesel and commercial‑vehicle turbochargers and a $34 million foreign‑currency gain. Earnings per share were $0.42, a $0.05 beat over the consensus estimate of $0.37.
Revenue growth was concentrated in the diesel and commercial‑vehicle segments, which expanded by 8% and 7% respectively, while gasoline‑segment sales slipped 3%. The foreign‑currency impact offset a modest decline in gasoline demand, allowing the company to lift overall sales despite a challenging macro environment.
Adjusted EBIT fell to $122 million from $124 million year‑ago, reflecting a 13.7% margin that slipped from 14.7% in the prior year. The decline was driven by an unfavorable product mix, lower productivity, and limited pricing pass‑through in the face of higher input costs. Gross profit margin contracted to 20.8% from 21.6% as the mix shift weighed on profitability.
Management reaffirmed its 2026 outlook, maintaining sales guidance of $3.60 billion to $3.80 billion and adjusted EBIT guidance of $520 million to $570 million. The modest growth range and margin compression signal caution about near‑term demand, prompting investors to focus on the forward‑looking guidance rather than the historical beat.
CEO Olivier Rabiller highlighted progress in zero‑emission and industrial technology, noting first production wins for its E‑Powertrain and E‑Cooling systems. CFO Sean Deason emphasized disciplined execution, reporting $403 million in adjusted free cash flow for the year and a 75% return to shareholders through dividends and a $72 million share‑repurchase program, with a new $250 million program authorized for 2026.
Investors reacted negatively to the guidance and margin contraction, underscoring concerns about the company’s ability to sustain growth in a shifting turbocharger market.
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