Engineering Operational Excellence Lead

Garrett Motion (NASDAQ: GTX) shares drop 11.6% post-earnings despite strong Q2 beat. Garrett Motion (NASDAQ: GTX) has shed approximately 11.6% since its most recent earnings report, underperforming the broader S&P 500 over the same period. The decline has raised questions among investors about whether the stock is due for a reversal or faces continued downward pressure heading into its next earnings release. Garrett reported second-quarter 2026 earnings of 53 cents per share, beating the Zacks Consensus Estimate of 46 cents by 15.2%, with earnings climbing 26.2% from 42 cents in the year-ago quarter. Net sales rose 6.9% year over year to $976 million, surpassing the consensus estimate of $964 million by 1.2%, supported by growth across all product verticals and productivity gains. Adjusted EBIT margin expanded 200 basis points to 15.6%, reflecting a favorable business mix and operational efficiencies across the company's divisions. Gasoline sales advanced 5% year over year, with new application launches and program ramp-ups in Europe, India, and South America providing meaningful support to the category. Diesel sales increased 8%, driven by light commercial vehicle and pickup truck demand across Europe, Asia, and South America, along with program ramp-ups in India. Commercial vehicle and industrial sales climbed 10% year over year, with strong on-highway demand in China and higher North American genset activity for data centers contributing significantly to the result. Industrial turbo sales exceeded $80 million during the first half, and the business is now expected to generate approximately $200 million in full-year sales, supported by power-generation demand. Gross profit increased to $212 million from $181 million, with gross margin improving to 21.7% from 19.8%, as volume growth and productivity more than offset commodity, transportation, and energy inflation. Adjusted EBIT rose $28 million year over year to a record $152 million, with higher volumes contributing $16 million and productivity adding another $10 million to the result. Net income totaled $101 million, up from $87 million a year earlier, while net income margin increased to 10.3% from 9.5%, driven primarily by higher gross profit and lower interest expense. Adjusted free cash flow edged up to $122 million from $121 million, representing 80% conversion from adjusted EBIT, with Garrett ending the quarter holding $788 million of total liquidity. The company repurchased $28 million of common stock during the quarter, bringing year-to-date buybacks to $115 million, while also paying $15 million in dividends during the period. GTX voluntarily repaid $50 million of term-loan debt during the quarter, reducing total debt principal to $1.39 billion from $1.44 billion at the end of 2025. On the technology front, Garrett secured multiple turbocharger awards, including a large North American light vehicle program and a major Garrett MEG award for data-center gensets across multiple regions. The company also began pre-development work on a commercial vehicle electric powertrain with a Japanese truck manufacturer, signaling a broader push into electrified drivetrain solutions. For the full year, Garrett raised its net sales outlook to $3.7 to $3.9 billion and lifted its adjusted EBIT guidance range to $560 million to $600 million, up from the prior range of $520 million to $600 million. Adjusted free cash flow guidance was also increased to a range of $385 million to $475 million, compared with the previous forecast of $355 million to $475 million. Despite the post-earnings share price weakness, Garrett holds a Zacks Rank of 2 (Buy), an aggregate VGM Score of A, and a value grade of A, placing it in the top 20% for value-focused investors.

Automotive turbocharger market to hit $22.35B by 2033. The market is driven by demand for higher engine efficiency, lower emissions and improved performance. Jeff White is the Managing Editor of Counterman. He joined Babcox after a 20-year career in TV News as a Producer. You can contact him at [email protected] Published: August 18, 2026 According to a report from MarketsandMarkets, the automotive turbocharger market is estimated to grow from $15.94 billion in 2026 to $22.35 billion by 2033, with a CAGR of 4.9% over the forecast period. The market is driven by demand for higher engine efficiency, lower emissions and improved performance. Turbocharging enables automakers to extract more power from smaller engines, supporting engine downsizing while maintaining performance. Growing adoption of turbocharged gasoline direct injection (GDI) engines in passenger vehicles, along with steady growth in commercial vehicle and off-highway equipment sales, is expanding demand. Advancements in variable geometry turbocharger (VGT), electronically controlled and electrically assisted turbochargers are improving boost response and efficiency, while hybrid powertrains are creating new opportunities for e-turbo adoption. VGT turbochargers expected to lead technology segment. VGT turbochargers are expected to remain the largest technology segment during the forecast period due to their ability to maintain effective boost across different engine speeds and loads, resulting in stronger low-speed torque, faster response and more precise air management. They also improve fuel efficiency and help engines meet tighter emission requirements, driving higher installation rates across vehicle types. In passenger cars, VGT adoption is expanding as gasoline engines become more highly boosted, increasingly use GDI technology and are integrated with hybrid powertrains. Light commercial vehicles (LCVs) and medium-duty vehicles are also seeing a growing application base as OEMs seek better low-speed torque, fuel economy and tighter control of exhaust emissions. VGT systems have a strong installation base in heavy commercial vehicles, including transit buses and long-haul trucks. With VGT established in commercial vehicles and gaining adoption in gasoline passenger cars and hybrid platforms, it is expected to retain its leading position during the forecast period. Passenger cars projected to be largest vehicle segment. Passenger cars are expected to remain the largest vehicle-type segment, supported by high production volumes and the growing use of turbocharged engines. Their larger share of total vehicle production, approximately 75% to 80% in 2026, supports higher turbocharger adoption. Gasoline engines remain an important application for turbochargers in passenger cars, while the gasoline-diesel mix varies by region. In Europe, gasoline accounted for 26.6% of new car registrations in 2025, compared with 8.9% for diesel, while hybrid-electric vehicles reached 34.5%. In Asia Pacific, gasoline powertrains represent a significant share of passenger-car demand, supported by the region's large production base, while diesel remains more concentrated in commercial-vehicle applications. North America also has a predominantly gasoline-oriented passenger-car market, with diesel demand concentrated in commercial vehicles. Globally, diesel passenger-car demand continues to decline as automakers and consumers shift toward gasoline, hybrid and other electrified powertrains. Turbocharging remains widely used in new diesel vehicles, particularly VGT/VNT systems, which improve boost control, low-speed torque and efficiency. Manufacturers are focusing on faster boost response, improved thermal efficiency and electrically assisted boosting to suit hybrid gasoline powertrains. For example, BorgWarner has expanded its turbocharger programs into gasoline-hybrid passenger vehicles, while Garrett Motion is developing E-Turbo solutions that combine electric assistance with energy recuperation. These initiatives reflect suppliers' readiness to advance turbocharging programs to support the changing passenger-car powertrain landscape. Asia Pacific to remain dominant region. Asia Pacific is expected to remain the leading region in the automotive turbocharger market, driven by its large automotive manufacturing base and a rapidly changing powertrain landscape. According to OICA, China produced 30.3 million passenger cars in 2025, while Japan, India, and South Korea produced 7.2 million, 5.4 million, and 3.8 million, respectively, underscoring the region's substantial production base and providing a strong foundation for turbocharger demand. Passenger-car demand remains largely gasoline-driven in China and India, with GDI engines accounting for a substantial share of gasoline applications, while Japan and South Korea have higher adoption of gasoline-hybrid and HEV powertrains. Commercial vehicles provide an additional, largely diesel-based demand base, particularly LCVs, trucks and buses, although China is seeing a shift toward electric buses. Turbocharger manufacturers are focusing on quicker response, better efficiency, electronic control and electric assistance to meet the needs of newer powertrains. BorgWarner is expanding its turbocharger business into hybrid applications in Asia, while Garrett Motion is developing electrified boosting solutions for hybrid powertrains. With its manufacturing scale, established supply networks and growing adoption of advanced powertrains, Asia Pacific is positioned to remain the largest regional market for automotive turbochargers.

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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