Key Highlights

  • Diluted EPS of USD 0.51 beat the consensus estimate of USD 0.45 and compared with USD 0.38 a year earlier.
  • Net sales of USD 930 million rose 3% organically, slightly below the consensus estimate of USD 935.23 million.
  • Adjusted EBIT reached USD 152 million, a 16.3% Margin that expanded 160 basis points from the prior year.
  • Adjusted free Cash Flow of USD 136 million funded USD 57 million of Buybacks and a USD 250 million plan.

Garrett Motion Inc. (NASDAQ:GTX) reported third quarter 2026 Diluted Earnings per Share of USD 0.51, above a consensus estimate of USD 0.45 and up from USD 0.38 a year earlier. Net sales were USD 930 million, up from USD 902 million but marginally under the consensus estimate of USD 935.23 million. Net Income rose to USD 97 million from USD 77 million, and the 3% sales gain held on both a reported and constant currency basis, including a 3 point drag from Tariff pass-throughs.

Chief Executive Officer Olivier Rabiller said sales outperformed light vehicle industry production while commercial vehicle and industrial sales grew 23%. Adjusted EBIT of USD 152 million rose USD 19 million, helped by favorable product mix and USD 13 million of better operating performance, despite a 70 basis point currency headwind.

Industrial Growth and Cash Returns

Industrial Demand was a central theme. Power generation programs accelerated beyond prior plans, and the company now projects industrial sales of USD 230 million this year and about USD 300 million in 2027, a 30% organic gain tied mainly to generator set applications. The company also launched a new high Volume E-Turbo with Mercedes and an off-road turbo for Polaris recreational vehicles, and it signed an industrial E-Cooling Compressor award with a new customer, Multistack, with deliveries starting in 2027.

Adjusted free cash flow was USD 136 million, a conversion of 89%. The company repurchased USD 57 million of stock and paid USD 15 million in dividends during the quarter, bringing year to date repurchases to USD 172 million. A voluntary USD 50 million term Loan repayment in October lifted year to date repayments to USD 100 million. Net cash from Operating Activities was USD 378 million over nine months versus USD 314 million.

Outlook Reaffirmed at the Midpoint

The chief financial officer said the company reaffirmed its midpoint outlook for all metrics and narrowed the ranges. Midpoints imply net sales of USD 3.8 billion, up 4% at constant currency, adjusted EBIT of USD 580 million at a 15.3% margin, and adjusted free cash flow of USD 430 million, a 74% conversion. Stronger operating performance lifted the adjusted EBIT and cash flow views, but foreign exchange headwinds, mainly in the fourth quarter, offset those gains.

The board authorized a new USD 250 million repurchase program for 2027 on October 28, 2026, and declared a fourth quarter Dividend of USD 0.08 per share, payable in December. Total Liquidity was USD 841 million, made up of USD 630 million of revolver capacity and USD 211 million of unrestricted cash. Net Leverage stood at 1.66 times, down from the prior quarter, with no near term Debt maturities and debt over 95% fixed.

Signposts for the Fourth Quarter and 2027

Four measurable items frame the coming reports. The first is currency, since management flagged fourth quarter foreign exchange as the main drag against the reaffirmed adjusted EBIT midpoint of USD 580 million. The second is industrial sales, with USD 230 million in 2026 and about USD 300 million in 2027 as the stated reference points.

The third is Capital returns, including the USD 0.08 dividend payable in December and the USD 250 million buyback for 2027. The fourth is the launch schedule, with the commercial vehicle E-Powertrain and industrial cooling products both slated for 2027, and net leverage of 1.66 times as the Balance Sheet marker.