Garrett Motion Q2 earnings call highlights. July 29, 2026 Key points. * Garrett Motion reported strong second-quarter results: Sales rose 7% to $976 million, while adjusted EBIT increased to a record $152 million and margins expanded to 15.6% despite lower light-vehicle production. * The company raised its 2026 outlook to $3.8 billion in sales, $580 million in adjusted EBIT and $430 million in adjusted free cash flow, citing strong first-half performance, favorable product mix and productivity gains. * Garrett continued returning capital to shareholders through $28 million in share repurchases and $15 million in dividends, while advancing industrial turbocharger awards and zero-emission technologies targeting commercial vehicles, passenger cars and data centers. * MarketBeat previews the top five stocks to own by August 1st. Garrett Motion NASDAQ: GTX reported higher second-quarter sales, record adjusted operating profit and expanded margins, citing growth across its light-vehicle, commercial-vehicle, industrial and aftermarket businesses. The company also raised its full-year 2026 outlook following what President and Chief Executive Officer Olivier Rabiller described as a strong first half. Second-quarter net sales totaled $976 million, up 7% from a year earlier on a reported basis and 5% at constant currency. Rabiller said the growth came despite lower light-vehicle production during the quarter, reflecting demand-share gains in light vehicles, a commercial-vehicle recovery and increased industrial demand. "We delivered growth across all of our verticals," Rabiller said, adding that the company had sold more than $80 million of turbos for industrial applications year to date. Garrett now expects industrial sales of about $200 million for the full year, with additional growth anticipated in the second half. Profitability and cash flow. Adjusted EBIT reached a record $152 million in the second quarter, up $28 million from the prior-year period. Adjusted EBIT margin rose 200 basis points year over year to 15.6%, including an 80-basis-point unfavorable foreign-exchange impact, according to Senior Vice President and Chief Financial Officer Sean Deason. Deason attributed the improvement primarily to increased volumes across all business lines, favorable mix from commercial vehicle, industrial and aftermarket growth, and productivity actions. Operating performance contributed $14 million during the quarter as the company's productivity measures continued to ramp up. Adjusted free cash flow was $122 million, representing an 80% conversion from adjusted EBIT. Garrett ended the quarter with total liquidity of $788 million, including $630 million of revolver capacity and $158 million of unrestricted cash. The company voluntarily repaid $50 million on its term loan during the quarter. Net leverage was 1.8 times, down sequentially, and Deason said Garrett has no near-term debt maturities. Capital returns and updated outlook. Garrett repurchased $28 million in common stock and paid $15 million in dividends during the second quarter. Year-to-date stock repurchases totaled $115 million under the company's $250 million authorization. The board declared a third-quarter dividend of $0.08 per share, payable in September. Deason said the company's capital-allocation framework targets returning roughly 75% of adjusted free cash flow to shareholders over time through dividends and repurchases, though the amount may vary with market conditions and other factors. Management raised its 2026 outlook across sales, adjusted EBIT and adjusted free cash flow. At the midpoint, the updated forecast calls for: * Net sales of $3.8 billion, representing 4% constant-currency growth; * Adjusted EBIT of $580 million; * An adjusted EBIT margin of 15.3%; and * Adjusted free cash flow of $430 million. Deason said the revised outlook reflects strong first-half results, a favorable mix trend and expected continued operating improvement. The company lowered its industry outlook for light-vehicle demand but expects share gains to help offset softer market conditions. The updated assumptions also reflect a stronger U.S. dollar relative to the euro. The revised full-year adjusted EBIT midpoint is $20 million above the prior outlook midpoint, driven by stronger product mix and operating performance, partly offset by foreign-currency headwinds. Industrial awards and zero-emission technologies. Garrett said it continued to win business across its turbocharger portfolio during the quarter, including multiple gasoline awards and a large North American program. It also secured several power-generation awards, including its first award for the MEG200 turbocharger for data-center power generation. Rabiller described the MEG200 as one of the largest turbochargers Garrett has produced. During the question-and-answer session, he said the newly announced award would not be a significant contributor to revenue in 2027, as large-engine development cycles typically take longer than a year. However, he said the company's industrial sales growth reflects an accumulated pipeline of awards secured over recent years. On power generation, Rabiller said Garrett historically had a strong position in diesel applications and has gained share in natural-gas applications in recent years. He said demand for genset-related products is global and extends beyond data centers, citing broader energy needs, grid weaknesses and renewable-energy infrastructure. The company also reported progress in zero-emission technologies. Garrett began pre-development work on a commercial-vehicle electric powertrain solution with a Japanese truck manufacturer, while its passenger-vehicle high-speed E-Powertrain continued to generate positive testing results and feedback from original equipment manufacturers. Rabiller said Garrett is in active discussions with multiple HVAC manufacturers following its previously announced E-Cooling partnership. He said the company expects its first product shipments in 2027, with data-center-related production occurring between late 2027 and early 2028. Market conditions and margins. Management said commercial-vehicle growth in the first half was supported by on-highway demand in China and by industrial applications, particularly larger turbochargers used in power-generation equipment. Rabiller said agricultural and construction-related off-highway demand remained in line with market observations. Deason said commercial-vehicle margins are generally stable across regions, while regional product mix can vary. He added that the company expects somewhat lower light-vehicle volumes in the second half but still anticipates outperforming the broader market and benefiting from a slightly improved mix. Rabiller said Garrett does not use short-term price reductions to gain vehicle-turbocharger volume, because turbocharger demand is tied to the number of vehicles produced. He said the company remains focused on internal costs, fixed costs, material costs and other profit-and-loss items, while acknowledging continued macroeconomic and geopolitical uncertainty. About Garrett Motion (NASDAQ:GTX). Garrett Motion Inc is a technology leader specializing in the design, development and manufacture of turbocharging systems and related technologies for the global automotive industry. Its product portfolio includes conventional exhaust gas turbochargers, variable-geometry turbochargers, electric and e-boost turbochargers, as well as electronic actuators, sensors and thermal management systems. The company's solutions are engineered to improve engine efficiency, reduce emissions and support automakers' efforts to meet evolving regulatory standards for fuel economy and air quality. Garrett Motion traces its roots to the founding of AiResearch by Cliff Garrett in 1936, a pioneer in aircraft and automotive turbocharging technologies. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. Before you consider Garrett Motion, you'll want to hear this. 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Dave Crompton joins Garrett Motion's board of directors. The veteran executive brings more than 40 years of leadership across commercial transportation, industrial & energy sectors... Garrett Motion, a global developer and producer of differentiated turbocharging and electrification technologies for mobility and industrial applications, announced the appointment of Dave Crompton to its board of directors. Crompton is executive chair and co-founder of Pioneer Clean Fleet Solutions and most recently served as president and CEO of Achates Power. He brings more than four decades of leadership experience across commercial transportation, industrial, energy and power generation applications, including 28 years at Cummins Inc., where he held several senior executive positions, including president of the Cummins Engine Business and president of Cummins Power Systems. "Dave is a highly respected industry leader with deep expertise in advanced powertrain technologies, industrial sector and global operations," said Daniel Ninivaggi, chairman of the board of Garrett. "His extensive experience driving innovation, operational excellence, and profitable growth across diverse industries will be a tremendous asset to Garrett as we continue to execute our strategy, expand our presence beyond automotive, and create long-term value for shareholders." "I am honored to join Garrett's board at such an exciting time for the company," said Crompton. "Garrett has a strong track record of technology leadership and is well positioned to capitalize on growth opportunities across both mobility and industrial applications. I look forward to working with the board and management team to support the company's continued success."