Garrett Motion Reports Mixed Q4: Sales Miss, EPS Beat, Soft Guidance And More

Garrett Motion Inc. GTX reported that fourth-quarter sales declined 11% year over year on reported and down 10% on a constant currency basis to $844 million, missing the consensus of $860.5 million.

The decline was mainly due to reduced diesel production in Europe and weaker gasoline demand in China and North America.

Gross profit was $182 million, compared to $189 million last year, with a gross profit margin of 21.6% versus 20.0% a year ago. EPS of 47 cents beat the consensus of 29 cents.

Adjusted EBITDA increased to $153 million from $145 million a year ago, led by improved variable and fixed cost productivity, commodity and transportation cost reductions, energy deflation, and a favorable product mix.

Operating cash flow totaled $131 million in the quarter, compared to $135 million a year ago. Adjusted free cash flow stood at $157 million versus $137 million a year ago.

As of December 31, 2024, Garrett had $725 million in liquidity, comprising $125 million in cash and $600 million in undrawn revolving credit. 

In the quarter, the company repurchased $70 million of shares under the authorized share repurchase program. In December 2024, the Board of Directors approved a new $250 million share repurchase program and also initiated a $50 million annual dividend, to be declared and paid quarterly for 2025.

FY25 Outlook: Garrett Motion projects net sales of $3.3 billion-$3.5 billion (vs. consensus of $3.604 billion), net income of $209 million-$254 million, and adjusted free cash flow of $300 million-$390 million.

Garrett expects light vehicle production to be flat to down 3% and the commercial vehicle industry to grow 0% to 2%, including on- and off-highway.

Olivier Rabiller, President and CEO of Garrett said, “We also made meaningful progress in validating the strength of our zero-emission technologies, securing additional partnerships and new business wins for Garrett’s automotive and industrial applications with major customers around the world. Further, these products are actively being tested by customers with launches planned for as early as 2027.”

Price Action: GTX shares are up 1.89% at $9.445 at the last check Thursday.

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