Key Takeaways:
Garrett Motion Inc. (GTX) raised its full-year 2026 forecast after reporting a 12% increase in first-quarter sales, driven by share gains and strong demand in its commercial vehicle and industrial segments.
The automotive technology company reported net sales of $985 million, reflecting 6% growth at constant currency, according to a statement released Thursday. The performance was supported by new business wins in its turbocharger and zero-emission product lines, including a second E-Powertrain award for commercial vehicles in China.
“We started the year by delivering another very strong set of financial results in the first quarter, driven by growth in a muted industry and disciplined operational execution,” President and Chief Executive Officer Olivier Rabiller said on the earnings call.
First-quarter adjusted EBIT rose to $151 million, a $20 million increase from the prior-year period, with the margin expanding 40 basis points to 15.3%. The company generated $49 million in adjusted free cash flow while returning $103 million to shareholders, comprising $87 million in share repurchases and $16 million in dividends.
The strong start to the year prompted Garrett to lift its 2026 outlook. The company now expects net sales to reach a midpoint of $3.75 billion, with adjusted EBIT of $560 million, implying a 14.9% margin for the full year. The guidance for adjusted free cash flow was also raised to a midpoint of $415 million. Management noted the outlook was raised despite caution around macroeconomic and geopolitical uncertainties.
Garrett highlighted significant progress in its zero-emission technology portfolio, which is expanding beyond its traditional turbocharger business. The company secured its second production award for a commercial vehicle E-Powertrain in China, with production scheduled for 2027. It also won a major contract for an industrial cooling compressor with TONFY, a Chinese supplier of cooling solutions for battery energy storage systems.
“These wins demonstrate customer adoption of our differentiated technologies across a broad range of applications, supporting both portfolio expansion and growth while continuing to deliver strong financial results,” Rabiller said.
Financially, the company ended the quarter with a stable net leverage ratio of 1.92x and a total liquidity position of $772 million. The board declared a second-quarter dividend of $0.08 per share, payable in June.
The guidance increase signals management’s confidence in continued market share gains and robust demand, particularly from commercial and industrial customers. Investors will watch the company’s Technology and Investor Day on May 20 for more details on its zero-emission revenue composition and long-term strategy.
This article is for informational purposes only and does not constitute investment advice.
