Financial Performance and Economic Conditions - The Company has experienced higher costs due to elevated inflation levels, which may continue to impact financial performance despite efforts to offset these costs[64] - Economic conditions, including inflation and consumer spending, are critical factors that could affect the Company's sales and overall financial condition[64] - The company has been negatively impacted by inflation, which has driven an increase in input costs, affecting operating margins[74] - The company anticipates lower levels of inflationary pressures in certain raw materials, labor, and energy for 2025[54] - For the year ended December 31, 2024, net sales were $3,403 million, a decrease of 2.8% from $3,500 million in 2023[20] - The Fuel Systems segment generated $2,264 million in sales for 2024, down from $2,407 million in 2023, while the Aftermarket segment increased to $1,393 million from $1,329 million[20] - The company derives approximately 40% of its net sales from its top five customers, with General Motors Company accounting for 17%[89] Supply Chain and Operational Risks - Disruptions in the supply chain have previously affected the company’s operations, and reliance on fewer suppliers increases this risk[90] - The company faces significant risks related to supply chain disruptions, which have previously impacted production levels and could continue to do so due to various global factors[91] - The company relies on a global supply chain, and changes in trade policies or international relations could adversely affect its business operations[75] - Work stoppages and production shutdowns at suppliers or customers could significantly disrupt operations and adversely affect financial results, as seen during strikes in 2023[95] - Prolonged shortages of critical components from suppliers may hinder the ability to meet production schedules for key products[92] - The company has experienced disruptions due to strikes affecting automakers, which limited purchases of its products and adversely impacted results during 2023[95] Competition and Market Position - Competition in the market is intense, with many competitors having larger portfolios and greater resources, which could impact the Company's market position[68] - The company faces strong competition from global manufacturers and distributors in its industry[67] - The company’s business in China is subject to aggressive competition and is sensitive to economic and political conditions, which could impact sales volumes[87] Regulatory and Compliance Issues - Regulatory investigations related to vehicle emissions standards could lead to significant costs, including fines and reputational harm, as evidenced by ongoing investigations in Germany[97] - Compliance with evolving environmental and sustainability regulations may result in increased operational costs and liabilities[99] - The company is subject to extensive regulations, including those related to environmental matters and data security[55] - The company may incur material costs related to compliance with evolving environmental and safety regulations, which could adversely affect its financial condition[99] Innovation and Product Development - The Company must continue to innovate and develop new products to meet changing consumer preferences and regulatory requirements, particularly in the electric vehicle segment[65] - The company is committed to developing new products and technologies in response to changing consumer preferences and regulatory requirements[65] - The Company holds over 2,500 active pending applications and issued patents worldwide, indicating a strong commitment to intellectual property[35] - Gross R&D costs increased to $209 million in 2024 from $188 million in 2023, reflecting ongoing investment in innovation[34] Workforce and Labor Issues - The company’s ability to attract and retain a qualified global workforce is critical, as failure to do so could lead to higher labor costs and employee turnover[79] - The workforce as of December 31, 2024, totaled 12,700 employees, with 5,600 in the Americas, 1,600 in Asia, and 5,500 in Europe[41] - The company is under pressure to maintain a qualified workforce, with challenges in attracting and retaining talent potentially leading to higher labor costs[79] Financial Structure and Spin-Off Implications - The Spin-Off was intended to provide strategic and financial benefits, but the company may not achieve all expected benefits in the anticipated timeframe[115] - The company faces additional costs and demands associated with being an independent, publicly traded entity since the Spin-Off on July 3, 2023[123] - If the Spin-Off is determined not to qualify as tax-free, the company could incur significant indemnification obligations to the Former Parent, adversely affecting financial condition[117] - Historical financial information prior to the Spin-Off may not accurately represent future results as an independent company[122] Cybersecurity and Data Security - The company has experienced targeted and non-targeted cybersecurity attacks, which pose risks to its information technology systems and data security[78] - Cybersecurity risks are increasing, with past incidents highlighting vulnerabilities that could lead to unauthorized access to sensitive information[78] Economic and Market Sensitivity - The company is subject to risks from international operations, including trade restrictions and fluctuations in foreign currency exchange rates[84] - The company is exposed to various risks, including economic downturns, competitive pressures, and supply chain disruptions, which could impact future performance[11] - The company’s operations are sensitive to economic, political, and market conditions in China, where aggressive competition has led to pricing pressure and reduced margins[87] Cost Management and Pricing Pressures - The Company faces substantial pressure from OEMs to reduce product prices, which could adversely affect profit margins if cost reductions are not achieved[71] - Commodity prices have been volatile, with significant increases in energy and base metals since early 2021, negatively affecting operating margins[74] - The company utilizes various measures to mitigate supply shortages and inflation, including long-term contracts and cost-sharing arrangements[53] - The integration of acquisitions is complex and may result in the loss of key employees and operational disruptions, affecting anticipated benefits[70]

Group 1: Earnings Performance - Phinia reported quarterly earnings of $0.71 per share, missing the Zacks Consensus Estimate of $0.80 per share, representing an earnings surprise of -11.25% [1] - The company posted revenues of $833 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 2.59%, but down from $882 million year-over-year [2] - Over the last four quarters, Phinia has surpassed consensus EPS estimates two times and topped consensus revenue estimates two times [2] Group 2: Stock Performance and Outlook - Phinia shares have increased by approximately 1.8% since the beginning of the year, compared to the S&P 500's gain of 2.9% [3] - The company's earnings outlook is crucial for investors, with current consensus EPS estimate at $1.26 on $850.1 million in revenues for the coming quarter and $4.45 on $3.4 billion in revenues for the current fiscal year [7] - The estimate revisions trend for Phinia is currently favorable, resulting in a Zacks Rank 2 (Buy) for the stock, indicating expected outperformance in the near future [6] Group 3: Industry Context - The Automotive - Original Equipment industry, to which Phinia belongs, is currently in the bottom 45% of over 250 Zacks industries, which may impact stock performance [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, suggesting that industry outlook can materially affect stock performance [5][8]

Financial Performance - Net sales for Q4 2024 were $833 million, a decrease of 5.6% compared to Q4 2023, with a full year net sales of $3.40 billion, down 2.8% from 2023[3] - Operating income for Q4 2024 was $51 million, a decrease of $30 million year-over-year, with an operating margin of 6.1%[3] - Adjusted EBITDA for Q4 2024 was $110 million, reflecting a year-over-year decrease of $17 million, with an adjusted EBITDA margin of 13.2%[3] - Adjusted sales for the year ended December 31, 2024 were $3,380 million, down from $3,450 million in 2023, a decrease of 2.0%[30] - Adjusted EBITDA for the year ended December 31, 2024 was $478 million, compared to $490 million in 2023, reflecting a decline of 2.4%[33] - Operating income for the year ended December 31, 2024 was $259 million, up from $241 million in 2023, an increase of 7.5%[31] - Adjusted net earnings per diluted share for Q4 2024 were $0.71, compared to $0.76 in Q4 2023, while the full year adjusted net earnings per diluted share were $3.86 in 2024, down from $4.19 in 2023[36] Cash Flow and Liquidity - The company generated net cash from operating activities of $73 million in Q4 2024, an increase of $11 million year-over-year, and adjusted free cash flow was $72 million, a 31% increase[3] - Net cash provided by operating activities increased from $250 million in 2023 to $308 million in 2024, representing a growth of 23.1%[19] - Cash and cash equivalents at the end of the period increased from $365 million in December 31, 2023 to $484 million in December 31, 2024, a rise of 32.5%[19] - Adjusted free cash flow for Q4 2024 was $72 million, up from $55 million in Q4 2023, with the full year adjusted free cash flow reaching $253 million compared to $161 million in 2023[37] Capital Expenditures and Investments - Capital expenditures for the year were $105 million, primarily for investments in new machinery and equipment[6] - Capital expenditures decreased to $20 million in Q4 2024 from $33 million in Q4 2023, with full year capital expenditures at $105 million, down from $150 million[37] Debt and Liabilities - The company ended 2024 with cash and cash equivalents of $484 million and long-term debt of $963 million[5] - Net debt increased from $433 million in December 31, 2023 to $504 million in December 31, 2024, an increase of 16.4%[20] - Total liabilities increased from $2,154 million in December 31, 2023 to $2,194 million in December 31, 2024, an increase of 1.9%[18] Shareholder Returns - The board declared a quarterly cash dividend of $0.27 per common share, an increase of 8% from the previous quarter[9] - Dividends paid to stockholders increased from $23 million in 2023 to $44 million in 2024, a significant increase of 91.3%[19] - The company authorized a $200 million increase to its share repurchase program, bringing the total available under the program to approximately $320 million[10] Asset Management - Total assets decreased from $4,041 million in December 31, 2023 to $3,768 million in December 31, 2024, a decline of approximately 6.7%[18] Special Items and Adjustments - The effects of separation-related transactions contributed $19 million in Q4 2024, compared to $26 million in Q4 2023, with full year contributions of $50 million versus $61 million[37] - The company reported a loss on debt extinguishment of $0.49 per diluted share for the full year 2024, while there were no such losses reported in 2023[36] - Restructuring expenses were $0.07 per diluted share in Q4 2024, compared to $0.04 in Q4 2023, with full year restructuring expenses at $0.31 versus $0.26[36] - Tax effects and adjustments negatively impacted earnings by $0.03 per diluted share in Q4 2024, compared to a $0.11 impact in Q4 2023[36] - The company experienced an asset impairment charge of $0.49 per diluted share in 2024, while no such charges were recorded in 2023[36] - Royalty income from the former parent company was not reported in 2024, while it negatively impacted earnings by $0.36 per diluted share in 2023[36]

Core Viewpoint - Phinia (PHIN) has been upgraded to a Zacks Rank 2 (Buy), indicating a positive trend in earnings estimates which is a significant factor influencing stock prices [1][2] Earnings Estimates and Stock Price Movement - The Zacks rating system is based on changes in earnings estimates, which are strongly correlated with stock price movements, particularly due to institutional investors adjusting their valuations based on these estimates [3][5] - An increase in earnings estimates typically leads to higher fair value for a stock, prompting institutional investors to buy or sell, thus affecting stock prices [3] Phinia's Earnings Outlook - The upgrade for Phinia reflects an improvement in its underlying business, with rising earnings estimates expected to drive the stock price higher [4][9] - Analysts project Phinia will earn $3.78 per share for the fiscal year ending December 2024, representing a year-over-year decline of 8.5%, but the Zacks Consensus Estimate has increased by 6.2% over the past three months [7] Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a strong historical performance, particularly Zacks Rank 1 stocks averaging a +25% annual return since 1988 [6][8] - Phinia's upgrade to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, indicating a strong potential for market-beating returns in the near term [9]

Financial Data and Key Metrics Changes - Net sales for Q3 2024 were $839 million, a decrease of 6.4% year-over-year, or down 3.7% on an adjusted sales basis excluding contract manufacturing agreements [9][26] - Adjusted EBITDA was $120 million, reflecting a year-over-year increase of 90 basis points [10][29] - Adjusted free cash flow remained healthy at $60 million, with cash and cash equivalents increasing to $477 million from $365 million at year-end 2023 [11][34] Business Line Data and Key Metrics Changes - The Aftermarket segment accounted for approximately 42% of sales, benefiting from higher pricing and volume, resulting in a year-over-year increase of 6% [6][27] - Fuel Systems segment sales decreased by 13.7%, or 9.7% excluding contract manufacturing effects, impacted by lower commercial vehicle sales in Europe and China [27][31] - Adjusted operating margins for the Aftermarket segment expanded by 210 basis points to 15.8%, while Fuel Systems segment margins increased by 110 basis points to 11.4% [30][31] Market Data and Key Metrics Changes - Sales in Europe showed a mild increase, while the Americas experienced a slight revenue uptick during the quarter [27] - The overall market environment remained dynamic, with inflation, geopolitical tensions, and currency volatility affecting performance [8] Company Strategy and Development Direction - The company is focused on executing long-term strategies, including launching new products and expanding in growing markets [5][23] - Capital allocation actions included replacing high-cost debt with $450 million in senior unsecured notes and increasing share repurchase authorization [16][19] - The company aims to maintain a disciplined approach to capital deployment, prioritizing investments for long-term growth and returning cash to shareholders [20] Management's Comments on Operating Environment and Future Outlook - Management expects continued softness in the market, particularly in the Fuel Systems segment, with a potential recovery in 2025 [41][44] - The company remains confident in its ability to generate meaningful cash flow and drive sustainable growth through strategic actions [39][40] Other Important Information - The company published its first sustainability report, highlighting its 2023 sustainability performance and initiatives [21][22] - The company has exited all material contract manufacturing agreements with its former parent [9][27] Q&A Session Summary Question: Outlook for markets in Q4 and sales by segment - Management expects continued softness in Q4, with a potential recovery in 2025, particularly in the commercial vehicle segment [41][44] Question: Implications of second half EBITDA guidance - Management indicated that the Fuel Systems segment is primarily affected, while the Aftermarket segment continues to show solid year-over-year growth [43][44]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☑ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended September 30, 2024 OR ☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to Commission file number 001-41708 PHINIA INC. (Exact name of registrant as specified in its charter) | --- | --- | --- | |------------------------------ ...

Phinia (PHIN) came out with quarterly earnings of $1.17 per share, beating the Zacks Consensus Estimate of $0.79 per share. This compares to earnings of $0.53 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 48.10%. A quarter ago, it was expected that this maker of gas and diesel fuel systems would post earnings of $1.15 per share when it actually produced earnings of $0.88, delivering a surprise of -23.48%.Over the last four q ...

Exhibit 99.1 PHINIA REPORTS THIRD QUARTER 2024 RESULTS Auburn Hills, Michigan, October 31, 2024 – PHINIA Inc. (NYSE: PHIN), a leader in premium fuel systems, electrical systems, and aftermarket solutions, today reported results for the third quarter ended September 30, 2024. Third Quarter Highlights: • Net sales of $839 million, a decrease of 6.4% compared with Q3 2023. ◦ Lower Fuel Systems (FS) sales in Europe and China partially offset by strong Aftermarket segment sales in Europe led to lower net sales c ...

PHINIA Inc. (NYSE:PHIN) Q2 2024 Earnings Conference Call July 30, 2024 8:30 AM ET Company Participants Kellen Ferris - Vice President of Investor Relations Gordon Muir - Vice President and Treasurer Brady Ericson - Chief Executive Officer Chris Gropp - Chief Financial Officer Conference Call Participants Jake Scholl - BNP Paribas Exane Adam Jonas - Morgan Stanley Daniel S - Barclays Drew Estes - Banyan Capital Management Inc Operator My name is Ian, and I will be your conference operator today. At this time ...

The Company manufactures and sells products and solutions, primarily to OEMs of commercial vehicle, industrial applications and light vehicles, to certain Tier One vehicle systems suppliers and into the aftermarket. The Company's payment terms are based on customary business practices and vary by customer type and products offered. The Company has evaluated the terms of its arrangements and determined that they do not contain significant financing components. | --- | --- | --- | --- | --- | --- | --- | --- ...