Garrett Motion tops Q3 expectations, raises outlook and dividend

Investing.com -- Garrett Motion Inc. (NASDAQ:GTX) on Thursday reported third-quarter earnings that exceeded analyst expectations, as the automotive technology provider benefited from strong turbocharger demand and improved industry conditions.

The company posted adjusted earnings of $0.38 per share for the third quarter, surpassing the analyst consensus of $0.32. Revenue reached $902 million, up 9% from the previous year and above analyst estimates of $857.95 million. On a constant currency basis, sales increased 6% YoY.

"Garrett delivered another strong quarter in Q3, outperforming the industry, expanding our Adjusted EBIT margin to 14.7% and generating $107 million of adjusted free cash flow," said Olivier Rabiller, President and CEO of Garrett.

The company’s gross profit margin improved to 20.6% from 20.1% in the same period last year, while adjusted EBIT margin expanded to 14.7% from 14.2%.

In a sign of confidence, Garrett’s Board of Directors approved a 33% increase in its quarterly dividend to $0.08 per share. The company also executed a $50 million voluntary early debt repayment on its Term Loan and repurchased $84 million of common stock during the quarter.

Garrett raised its full-year 2025 outlook, now expecting revenue between $3.5 billion and $3.6 billion, with the midpoint aligning with the analyst consensus of $3.53 billion. The company also increased its adjusted EBIT forecast to $490-$530 million from the previous range of $470-$530 million.

The improved outlook reflects Garrett’s year-to-date performance and favorable industry conditions, with the company projecting light vehicle industry production to be flat to up 2% versus 2024, and commercial vehicle industry production to be flat to up 2%.

"We continued to strengthen our global leadership in turbocharging, including plug-in hybrids and range-extended electric vehicles," Rabiller added, noting key wins in light-vehicle platforms in the US, India, and Brazil, as well as over $40 million in expected lifetime revenue for data center backup power generation applications.

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