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Phinia (PHIN) appears an attractive pick, as it has been recently upgraded to a Zacks Rank #1 (Strong Buy). This upgrade is essentially a reflection of an upward trend in earnings estimates -- one of the most powerful forces impacting stock prices.The Zacks rating relies solely on a company's changing earnings picture. It tracks EPS estimates for the current and following years from the sell-side analysts covering the stock through a consensus measure -- the Zacks Consensus Estimate.Individual investors oft ...

Core Insights - PHINIA reported a strong fourth-quarter performance with net sales of $889 million, reflecting a 6.7% increase year-over-year, driven by growth in both Fuel Systems and Aftermarket segments for the third consecutive quarter [3][4][7] Financial Performance - Fuel Systems sales reached $560 million, up 7.9%, with an adjusted operating margin of 10.7% [2] - Aftermarket sales were $329 million, up 4.8%, with an adjusted operating margin of 15.8% [2] - Adjusted EBITDA for the quarter was $116 million, a $6 million increase from the previous year, with a margin of 13% [2][9] - Full-year revenue was approximately $3.5 billion, up 3%, with adjusted EBITDA of $478 million, remaining flat year-over-year [11][7] Growth Drivers - The company experienced favorable foreign exchange impacts of approximately $25 million and tariff recoveries of about $15 million, contributing to revenue growth [10][6] - Excluding these factors, revenue growth was modest at 2.3% for Q4 and 1.1% for the full year [6][11] Capital Allocation - PHINIA aggressively returned capital to shareholders, repurchasing 9.8 million shares (about 21% of the original count) and returning over $500 million through buybacks and dividends [5][18] - The company announced an 11% increase in dividends and a $150 million increase in the share repurchase program [18] 2026 Outlook - For 2026, PHINIA guided net sales between $3.5 billion and $3.7 billion, with adjusted EBITDA expected to be between $485 million and $525 million [20] - The company anticipates industry volumes to be flat to slightly down, but aims to offset this through market share gains in Aftermarket and growth in Off-Highway and Industrial segments [19][20]

Corporate Structure and Acquisitions - The Company completed the Spin-Off from BorgWarner on July 3, 2023, distributing PHINIA common stock to BorgWarner shareholders on a pro rata basis [18]. - On August 1, 2025, the Company acquired 100% of Swedish Electromagnet Invest AB for $47 million, enhancing its Fuel Systems segment with advanced alternative fuel technologies [19]. Financial Performance - Total net sales for the Company in 2025 were $3,483 million, representing a 2.35% increase compared to $3,403 million in 2024 [22]. - In 2025, net sales for the Fuel Systems segment were $2,320 million, an increase of 1.98% from $2,275 million in 2024, while Aftermarket segment sales reached $1,306 million, up 1.87% from $1,282 million in 2024 [22]. - The Company's unconsolidated joint venture sales amounted to approximately $256 million in 2025, up from $224 million in 2024 [23]. - Approximately 37% of the Company's net sales in 2025 were generated in the United States, while 63% were from international markets [29]. - For the year ended December 31, 2025, 35% of net sales were attributed to Service (OES and IAM), 25% to light passenger vehicle applications, and 19% to light commercial vehicle applications [30]. - The Company’s top five customers accounted for 37% of total sales in 2025, with General Motors representing 18% of net sales [32]. Research and Development - Gross R&D costs for 2025 were $190 million, with net R&D costs at $105 million, representing 3.0% of net sales [38]. - The Company held over 2,750 active pending applications and issued patents worldwide, indicating a strong commitment to intellectual property [39]. - The Fuel Systems segment includes advanced fuel injection systems and associated software aimed at reducing emissions and improving fuel economy [24]. Risk Management and Compliance - The Company faces risks related to economic conditions, competitive pressures, and supply chain disruptions that could impact its performance [10]. - The company employs various strategies to mitigate supply shortages and inflation, including near shoring and dual sourcing, and plans to continue these measures into 2026 [61]. - Commodity prices have been volatile, with the company experiencing price increases for energy, gases, and base metals since 2024, leading to higher operational costs [62]. - New trade regulations and tariffs are expected to impact input costs and supply availability, necessitating flexibility in supply chain management [63]. - The company is committed to compliance with extensive regulations across various domains, including environmental and data security laws [64]. - The company engages in proactive risk management during product development to ensure compliance with regulatory standards [65]. Stakeholder Engagement and Transparency - The Company emphasizes collaboration with stakeholders, including government agencies, to engage in public policy processes affecting its business [66]. - The company provides access to its financial reports, including the Annual Report on Form 10-K, through its investor relations website [67]. - The Company plans to announce future developments and financial performance through its websites and press releases [68]. - Future announcements regarding company developments will be made through its official websites and press releases [68]. Workforce and Leadership - As of December 31, 2025, the workforce comprised 12,500 employees, with 5,500 in the Americas, 1,700 in Asia, and 5,300 in Europe [46]. - The company prioritizes employee health and safety, maintaining ISO certifications at manufacturing facilities, with a focus on continuous improvement in safety performance [57]. - The executive team includes experienced leaders with backgrounds in various sectors, enhancing the company's strategic direction and operational efficiency [69].

分组1 - Phinia reported quarterly earnings of $1.18 per share, missing the Zacks Consensus Estimate of $1.35 per share, but showing an increase from $0.71 per share a year ago, resulting in an earnings surprise of -12.59% [1] - The company posted revenues of $889 million for the quarter ended December 2025, surpassing the Zacks Consensus Estimate by 5.13% and increasing from $833 million year-over-year [2] - Phinia has surpassed consensus EPS estimates two out of the last four quarters and topped consensus revenue estimates three times in the same period [2] 分组2 - The stock has gained approximately 24% since the beginning of the year, significantly outperforming the S&P 500's gain of 1.4% [3] - The current consensus EPS estimate for the upcoming quarter is $1.08 on revenues of $790.2 million, while for the current fiscal year, the estimate is $5.93 on revenues of $3.51 billion [7] - The Automotive - Original Equipment industry, to which Phinia belongs, is currently ranked in the bottom 42% of over 250 Zacks industries, indicating potential challenges ahead [8]

Financial Data and Key Metrics Changes - Total net sales for Q4 2025 were $889 million, representing a year-over-year increase of 6.7% [5][15] - Adjusted EBITDA for the quarter was $116 million, up $6 million, with a margin of 13% [6][16] - Adjusted earnings per diluted share increased to $1.18 from $0.71 in the same period last year [7] - Full year revenue was approximately $3.5 billion, a 3% increase, excluding final contract manufacturing sales from the former parent [17][18] Business Line Data and Key Metrics Changes - Fuel system segment sales for Q4 were $560 million, up 7.9%, with an adjusted operating margin of 10.7% [6][19] - Aftermarket segment sales were $329 million, up 4.8%, with an adjusted operating margin of 15.8% [7][20] - For the full year, fuel systems revenue increased by 3.3%, while aftermarket segment sales rose by 2.7% [19][20] Market Data and Key Metrics Changes - Sales in Asia and the Americas showed strength, while Europe experienced lower sales within fuel systems [14][15] - The company noted that the aftermarket segment remained resilient, supported by an aging global vehicle fleet [9] Company Strategy and Development Direction - The company aims to differentiate through product leadership and focus on sustainable growth markets [12][24] - Capital allocation remains disciplined, with a focus on M&A opportunities while returning capital to shareholders [10][11] - The company plans to continue expanding its presence in core and adjacent markets, including aerospace and defense [8][12] Management's Comments on Operating Environment and Future Outlook - Management highlighted the resilience of the business amid a complex operating landscape and expressed confidence in long-term growth [3][25] - The outlook for 2026 anticipates flat to slightly down global industry volumes, with expectations of mid-single-digit sales growth [24][25] Other Important Information - The company reduced its debt by $24 million, resulting in a net leverage ratio decrease from 1.4x to 1.3x [7][21] - An 11% increase in dividends and a $150 million increase in the share repurchase program were announced [11][21] Q&A Session Summary Question: Clarification on commercial vehicle growth expectations in Europe - Management confirmed that the mid to upper single digits growth expectation refers to the overall industry [27][29] Question: Inquiry about Adjusted EBITDA margins and growth hurdles - Management explained that while revenue growth is expected, factors like FX and tariffs are impacting margin expansion [30][31] Question: Details on the third aerospace and defense supply contract - Management confirmed that the third contract is with the same customer as the previous two [32] Question: Volume assumptions for 2026 and potential for positive light vehicle volumes - Management indicated that the market is expected to be flat to down, but the company anticipates market share gains [82][84] Question: Capital allocation priorities and M&A outlook - Management stated that capital allocation decisions will focus on maximizing shareholder value, with share repurchases remaining a priority [59][60]

Financial Data and Key Metrics Changes - Total net sales for Q4 2025 were $889 million, representing a year-over-year increase of 6.7% [5][14] - Adjusted EBITDA for the quarter was $116 million, up $6 million from the previous year, with a margin of 13% [6][15] - Adjusted earnings per diluted share increased to $1.18 from $0.71 in the same period last year [7] - Full year revenue was approximately $3.5 billion, a 3% increase, with adjusted EBITDA flat year-over-year at $478 million [16][17] Business Line Data and Key Metrics Changes - Fuel Systems segment sales for Q4 were $560 million, up 7.9%, with an adjusted operating margin of 10.7% [6] - Aftermarket segment sales reached $329 million, up 4.8%, with an adjusted operating margin of 15.8% [7][19] - For the full year, Fuel Systems revenue increased by 3.3%, while Aftermarket sales were up 2.7% [18][19] Market Data and Key Metrics Changes - Sales in Asia and the Americas showed strength, while Europe experienced lower sales within the Fuel Systems segment [14] - The company noted that the Aftermarket segment remained resilient, supported by an aging global vehicle fleet [9] Company Strategy and Development Direction - The company aims to differentiate through product leadership and focus on sustainable growth markets [12][24] - Capital allocation remains disciplined, with a focus on M&A opportunities while returning capital to shareholders [10][11] - The company plans to continue expanding its presence in Off-Highway, Industrial, and Other markets, which now represent 6% of sales [10][19] Management's Comments on Operating Environment and Future Outlook - Management highlighted the resilience of the business amid a complex operating landscape and expressed confidence in long-term growth [3][25] - For 2026, the company expects industry volumes to be flat to slightly down globally, but aims to offset this through market share gains [23][24] Other Important Information - The company reduced its debt by $24 million, resulting in a net leverage ratio decrease from 1.4x to 1.3x [7] - Cash flow from operations for the year was $312 million, with adjusted free cash flow above guidance at $212 million [21][22] Q&A Session Summary Question: Clarification on commercial vehicle guidance in Europe - Management confirmed that the guidance reflects overall industry expectations, with positive signs from customers in the region [28] Question: Inquiry about Adjusted EBITDA margins - Management explained that while revenue growth is expected, margin expansion is limited due to factors like FX and tariffs [30] Question: Details on the new aerospace and defense supply contract - Management indicated that the new contract is with the same customer as previous contracts, showing momentum in other areas as well [31] Question: Volume assumptions for 2026 and competitor behavior - Management noted that while the market may be flat to down, they expect to gain market share and continue growth despite competitors de-emphasizing certain platforms [84][86]

Financial Data and Key Metrics Changes - Total net sales for Q4 2025 were $889 million, representing a year-over-year increase of 6.7% [5][12] - Adjusted EBITDA for the quarter was $116 million, up $6 million from the previous year, with a margin of 13% [5][14] - Adjusted earnings per diluted share increased to $1.18 from $0.71 in the same period last year [6] - Full year revenue was approximately $3.5 billion, a 3% increase, with adjusted EBITDA flat year-over-year at $478 million [15][16] Business Line Data and Key Metrics Changes - The fuel system segment reported sales of $560 million, up 7.9%, with an adjusted operating margin of 10.7% [5][17] - The aftermarket segment had sales of $329 million, up 4.8%, with an adjusted operating margin of 15.8% [6][18] - Adjusted operating income for the fuel system segment was $244 million, an increase of $16 million year-over-year [17] Market Data and Key Metrics Changes - Sales in Asia and the Americas showed strength, while Europe experienced lower sales within fuel systems [12][13] - The aftermarket segment's demand was supported by an aging global vehicle fleet and an expanding portfolio [8] Company Strategy and Development Direction - The company aims to differentiate through product leadership and focus on sustainable growth markets [11][22] - Capital allocation remains disciplined, with a focus on M&A opportunities while returning capital to shareholders [9][10] - The company completed its first acquisition in 2025 and received aerospace quality certification [10] Management's Comments on Operating Environment and Future Outlook - The management highlighted resilience amid a dynamic macro and industry environment, with diversification across regions and products serving as a strength [3][4] - For 2026, the company expects industry volumes to be flat to slightly down globally, but aims to offset this through market share gains [21][22] - The adjusted effective tax rate is projected to be in the 30%-34% range for 2026 [22] Other Important Information - The company reduced its debt by $24 million, resulting in a net leverage ratio decrease from 1.4x to 1.3x [6] - A dividend increase of 11% and a $150 million increase in the share repurchase program were announced [10] Q&A Session Summary Question: Clarification on commercial vehicle growth expectations in Europe - Management confirmed that the guidance reflects overall industry expectations, with positive signs from customers in the region [25][26] Question: Inquiry about Adjusted EBITDA margins and growth hurdles - Management explained that while revenue growth is expected, margin expansion is limited due to factors like FX and tariff impacts [27][28] Question: Details on the third aerospace and defense supply contract - Management confirmed that the third contract is with the same customer as the previous two [29] Question: Volume assumptions for 2026 and potential for positive light vehicle volumes - Management indicated that while the market may be flat to down, they expect to gain market share and continue growth [78][80] Question: Competitors' focus on GDI platforms and ICE vehicles - Management noted that competitors have not significantly changed their strategies, allowing the company to gain market share [81][82]

This presentation contains forward-looking statements within the meaning of U.S. federal securities laws. Forward-looking statements are statements other than historical fact that provide current expectations or forecasts of future events based on certain assumptions and are not guarantees of future performance. Forward-looking statements use words such as "anticipate," "believe," "continue," "could," "designed," "effect," "estimate," "evaluate," "expect," "forecast," "goal," "initiative," "intend," "likely ...

Financial Performance - Net sales for Q4 2025 reached $889 million, a 6.7% increase compared to Q4 2024, with a net earnings of $45 million and a net margin of 5.1%[4] - For the full year 2025, net sales totaled $3.48 billion, reflecting a 2.4% increase from 2024, with net earnings of $130 million and a net margin of 3.7%[4] - Adjusted EBITDA for Q4 2025 was $116 million, a year-over-year increase of $6 million, with an adjusted EBITDA margin of 13.0%[4] - Adjusted sales for the year ended December 31, 2025, reached $3,483 million, a 3.1% increase from $3,380 million in 2024[28] - Adjusted EBITDA for the year ended December 31, 2025, was $478 million, consistent with the previous year, resulting in an adjusted EBITDA margin of 13.7%[29] - Net earnings for the three months ended December 31, 2025, were $45 million, significantly up from $5 million in the same period of 2024[30] - Adjusted net earnings per diluted share for the year ended December 31, 2025, increased to $4.96, compared to $3.86 in 2024, marking a 28.6% rise[31] Shareholder Returns - The company returned $40 million to shareholders in Q4 2025 through $30 million in share repurchases and $10 million in dividends[4] Future Projections - The company expects 2026 net sales to be between $3.52 billion and $3.72 billion, indicating a year-over-year growth of 1% to 7%[7] - Projected net earnings for 2026 are estimated to be between $165 million and $195 million, with an adjusted EBITDA forecast of $485 million to $525 million[7] Cash Flow and Capital Expenditures - Adjusted free cash flow for 2025 was $212 million, down from $253 million in 2024, primarily due to higher capital expenditures[6] - Net cash provided by operating activities for the year ended December 31, 2025, was $312 million, up from $308 million in 2024, indicating a 1.3% increase[17] - Adjusted free cash flow for Q4 2025 was $91 million, compared to $72 million in Q4 2024, reflecting a 26.4% increase year-over-year[32] - Net cash provided by operating activities increased to $96 million in Q4 2025 from $73 million in Q4 2024, representing a 31.5% growth[32] - Capital expenditures for the year ended December 31, 2025, totaled $124 million, up from $105 million in 2024, representing an increase of 18.1%[17] - Capital expenditures rose to $29 million in Q4 2025, up from $20 million in Q4 2024, indicating a 45% increase[32] Assets and Liabilities - The company ended 2025 with cash and cash equivalents of $359 million and total debt of $970 million[6] - Total assets increased to $3,817 million as of December 31, 2025, compared to $3,768 million in 2024, reflecting a growth of 1.3%[16] - Total liabilities rose to $2,230 million as of December 31, 2025, from $2,194 million in 2024, reflecting a 1.6% increase[16] - Net debt increased to $611 million as of December 31, 2025, compared to $504 million in 2024, indicating a rise of 21.2%[18] - Cash and cash equivalents decreased to $359 million as of December 31, 2025, from $484 million in 2024, a decline of 25.9%[18] Business Development - The company secured a new business win in India for Port Fuel Injectors, emphasizing its commitment to alternative fuel systems[8] - The company achieved strong growth in its Aftermarket segment by adding approximately 5,800 new SKUs across its portfolio[8] Separation and Acquisition Costs - The company incurred $39 million in separation-related costs, primarily due to claims settlement and professional fees associated with the spin-off[32] - Merger and acquisition costs were primarily related to professional fees for acquisition initiatives, although specific figures were not disclosed[32] - The effects of separation-related transactions contributed $24 million to adjusted free cash flow in Q4 2025, compared to $19 million in Q4 2024[32]