Garrett Motion Inc. GTX reported second-quarter 2026 earnings of 53 cents per share, beating the Zacks Consensus Estimate of 46 cents by 15.2%. Earnings increased 26.2% from 42 cents in the year-ago quarter.
Net sales rose 6.9% year over year to $976 million and surpassed the consensus estimate of $964 million by 1.2%. Growth across all product verticals, productivity gains and a favorable business mix supported the performance. Adjusted EBIT margin expanded 200 basis points to 15.6%.
GTX currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Garrett Motion Inc. Price, Consensus and EPS Surprise
Garrett Motion Inc. price-consensus-eps-surprise-chart | Garrett Motion Inc. Quote
GTX Posts Growth Across All Verticals
Net sales increased 7% on a reported basis and 5% at constant currency. The improvement reflected share-of-demand gains in passenger vehicles, stronger commercial vehicle and industrial demand, and higher aftermarket volumes.
Gasoline sales advanced 5% year over year, including 3% growth at constant currency. New application launches and program ramp-ups in Europe, India and South America supported the category.
Diesel sales increased 8%, or 6% at constant currency, 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 on both reported and constant-currency bases. Strong on-highway demand in China following program launches and higher North American genset activity for data centers contributed to the increase. Industrial turbo sales exceeded $80 million during the first half. The business is now expected to generate about $200 million in full-year sales, supported by power-generation demand.
Aftermarket sales rose 8%, or 7% excluding currency effects, as volumes improved in Europe, China and Australia.
GTX Expands Profitability Despite Inflation
Gross profit increased to $212 million from $181 million. Gross margin improved to 21.7% from 19.8%. Higher sales volumes, productivity, pricing net of inflation pass-through, lower research, development and engineering costs, and favorable product mix more than offset commodity, transportation and energy inflation.
Adjusted EBIT rose $28 million year over year to a record $152 million. Higher volumes contributed $16 million, productivity added $10 million and pricing net of inflation pass-through provided $8 million. These benefits were partly offset by $8 million of inflation-related costs and a $5 million unfavorable currency impact.
Garrett Strengthens Cash Flow and Liquidity
Net income totaled $101 million, up from $87 million a year earlier, while net income margin increased to 10.3% from 9.5%. The improvement was mainly driven by higher gross profit and lower interest expense, partially offset by increased taxes, lower non-operating income and higher selling, general and administrative expenses.
Net cash provided by operating activities was $145 million, compared with $158 million in the prior-year period. Adjusted free cash flow edged up to $122 million from $121 million, representing 80% conversion from adjusted EBIT. Garrett ended the quarter with $788 million of liquidity, including $158 million in unrestricted cash and $630 million of available revolver capacity.
GTX Returns Capital and Reduces Leverage
The company repurchased $28 million of common stock during the quarter, bringing year-to-date buybacks to $115 million. Garrett also paid $15 million in dividends, while its board declared a third-quarter dividend of 8 cents per share.
GTX voluntarily repaid $50 million of term-loan debt during the quarter. Total debt principal declined to $1.39 billion from $1.44 billion at the end of 2025. The company had $135 million remaining under its share-repurchase authorization at quarter-end.
Garrett Advances Its Technology Pipeline
The company secured multiple turbocharger awards, including a large North American light vehicle program and several commercial vehicle applications in China and India. It also won a major Garrett MEG award for data-center gensets and additional power-generation programs across multiple regions.
Garrett began pre-development work on a commercial vehicle electric powertrain with a Japanese truck manufacturer. The company also secured a production award for industrial air compression using its centrifugal compressor technology and reported growing interest from heating, ventilation and air-conditioning manufacturers in its electric cooling solutions.
GTX Raises Its Full-Year 2026 Outlook
Garrett now expects 2026 net sales of $3.7-$3.9 billion, compared with the previous range of $3.6-$3.9 billion. Constant-currency sales growth is projected between 1% and 7%, up from the earlier forecast of a 2% decline to 6% growth.
Adjusted EBIT is anticipated between $560 million and $600 million versus the prior range of $520-$600 million. Adjusted free cash flow is forecast in the band of $385-$475 million compared with $355-$475 million previously. The revised outlook reflects first-half execution, a stronger product mix and continued productivity benefits, despite softer expected light vehicle production.
Key Releases From the Auto Space
General Motors GM reported second-quarter 2026 adjusted earnings of $3.57 per share, up 41.3% year over year. The figure beat the Zacks Consensus Estimate of $3.13 by 14.06%. Revenues increased 1.9% to $48.03 billion and surpassed the consensus estimate of $46.56 billion by 3.15%. General Motors raised its full-year adjusted EBIT guidance to $14-$16 billion from $13.5-$15.5 billion. Adjusted earnings are now projected to be $12-$14 per share, up from the prior range of $11.50-$13.50.
Tesla, Inc. TSLA reported second-quarter 2026 adjusted earnings of 33 cents per share, which declined 17.5% year over year. The figure missed the Zacks Consensus Estimate of 50 cents by 34%. Revenues advanced 25.5% to $28.24 billion and surpassed the consensus estimate of $25.81 billion by 9.41%. Tesla expects 2026 capital expenditures to exceed $25 billion and rise further over the next two to three years.
Ford F reported second-quarter 2026 adjusted earnings of 42 cents per share, beating the Zacks Consensus Estimate of 33 cents by 27.27%. Earnings rose 13.5% from 37 cents a year ago. Automotive revenues of $44.89 billion fell 4.4% year over year and missed the consensus mark of $45.72 billion by 1.81%. Ford’s consolidated second-quarter revenues came in at $48.3 billion, down 3.7% year over year. The company raised its full-year adjusted EBIT outlook to $10-$11 billion from $8.5-$10.5 billion.
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