Garrett Motion (US:GTX)2025-10-23 11:03Financial Performance - In Q3 2025, Garrett Motion Inc. reported a net income of $77 million and adjusted EBIT of $133 million, driven by sustainable cost initiatives and favorable foreign exchange conditions [113]. - Net sales for the three months ended September 30, 2025, increased by $76 million or 9% compared to the prior period, including a $26 million favorable impact from foreign currency translation [122]. - Gasoline product sales rose by $45 million or 13%, primarily due to new application launches in Europe, China, India, and North America [123]. - Diesel product sales increased by $21 million or 12%, supported by strong light commercial vehicle performance in Europe and sustained demand for pickup trucks in North America [124]. - For the nine months ended September 30, 2025, net sales increased by $62 million or 2%, including a $28 million favorable impact from foreign currency translation [128]. - Net income for the three months ended September 30, 2025, increased by $25 million to $77 million, driven by a $20 million increase in gross profit [154]. - Adjusted EBIT for the three months ended September 30, 2025, increased by $16 million to $133 million, driven by higher sales volumes and productivity [163]. - Adjusted EBIT increased by $27 million year-over-year, driven by $40 million in productivity gains and $22 million from higher sales volumes in gasoline and commercial vehicles [169]. Expenses and Costs - Cost of goods sold for Q3 2025 was $716 million, an increase of 8.5% compared to the prior period, while gross profit margin improved to 20.6% [133]. - Selling, general and administrative (SG&A) expenses for the three months ended September 30, 2025, increased by $4 million to $57 million, representing 6.3% of sales [139]. - For the nine months ended September 30, 2025, SG&A expenses decreased by $3 million to $175 million, primarily due to a $5 million reduction in personnel costs [140]. - Interest expense for the three months ended September 30, 2025, decreased by $8 million to $29 million, attributed to lower interest expense from the Amendment and Restatement of the Credit Agreement [143]. - The company experienced a $60 million impact from unfavorable product mix on gross profit for the nine months ended September 30, 2025 [137]. Shareholder Returns - The company repurchased $84 million of common stock during the quarter, with $114 million remaining under the share repurchase program as of September 30, 2025 [115]. - The Board of Directors declared a cash dividend of $0.06 per share, totaling $11 million paid on September 16, 2025 [116]. - The company declared a cash dividend of $0.08 per share, payable on December 15, 2025, to shareholders of record as of December 1, 2025 [174]. - The company repurchased $136 million of Common Stock during the nine months ended September 30, 2025, with $114 million remaining under the share repurchase program [176]. Cash Flow and Financing - Cash provided by operating activities rose by $37 million to $314 million for the nine months ended September 30, 2025, primarily due to a $44 million increase in net income [178]. - Cash used for financing activities decreased significantly to $187 million from $439 million in the prior year, reflecting lower debt repayments and stock repurchases [180]. - As of September 30, 2025, cash and cash equivalents increased to $230 million from $125 million at the end of 2024 [172]. - Cash flow used for investing activities decreased by $28 million to $(27) million for the nine months ended September 30, 2025, compared to the prior year [179]. - The company refinanced its $692 million 2021 Dollar Term Facility with a new 2025 Dollar Term Facility, maturing on January 30, 2032 [172]. Strategic Initiatives - Garrett Motion Inc. deepened strategic collaborations with OEMs for zero-emission technologies, laying the foundation for future business growth [114]. - The company expects to continue investing in manufacturing capacity and new technologies, particularly in zero-emission technologies [175]. - The company revised its non-GAAP reporting metric from Adjusted EBITDA to Adjusted EBIT to better reflect core operating performance [157]. Other Financial Metrics - The effective tax rate for the three months ended September 30, 2025, was 24.5%, down from 31.6% in the prior year [148]. - Non-operating income for the nine months ended September 30, 2025, increased by $3 million to $10 million, primarily due to higher foreign exchange transactional gains [147]. - Other expense, net for the nine months ended September 30, 2025, increased by $4 million to $9 million, mainly due to third-party costs related to the Restatement Agreement [142]. - The net fair value of financial instruments with currency risk was $164 million, with a potential loss or gain of $271 million and $(268) million from a hypothetical 10% change in exchange rates [187]. - The company experienced growth in gasoline volumes from new application launches and program ramp-ups in multiple regions, including Europe and North America [164].