Garrett Motion (NASDAQ:GTX) Inc. reported strong financial results for the third quarter, emphasizing robust operational performance and strategic focus. The company also announced the launch of their largest turbo, the GT80, and won two pre-development awards for their e-cooling compressor, a key component in zero-emission vehicles. Despite a downward revision in their 2023 outlook due to a weaker euro to U.S. dollar exchange rate, the company remains committed to robust operational execution.
Key takeaways from the call include:
- Adjusted EBITDA for the quarter was $152 million, up from $146 million in the same period last year, representing a solid 4.1% increase.
- Adjusted free cash flow was $57 million, down from $121 million in the previous year, primarily due to timing of working capital. InvestingPro data shows a strong free cash flow yield, suggesting the company is efficiently generating cash.
- The company repurchased $161 million of stock and executed an early repayment of $200 million of debt.
- Garrett Motion introduced the GT80, expanding their product range for industrial and off-highway customers.
- The company won two pre-development awards for their high-performance e-cooling compressor, furthering their progress in zero-emission vehicle products.
- The company revised their 2023 outlook due to a weaker euro to U.S. dollar exchange rate.
- The company aims to generate $1 billion in revenue from zero-emission vehicle products by 2030. InvestingPro Tips indicate a promising revenue growth, which has been accelerating recently.
In the earnings call, the company reported a net income of $264 million and adjusted EBITDA of $630 million, resulting in an adjusted EBITDA margin of 16.3% for the full year. Net cash provided by operating activities was $438 million, and adjusted free cash flow was $375 million.
Garrett Motion also discussed their increased exposure to the North American market due to changing regulations. The introduction of the GT80 turbocharger is expected to broaden their product line and provide technology for large engines used in power generation applications, locomotives, and marine applications. The company sees potential in new energy sources such as natural gas and expects sales of nearly $20 million in fuel cell compressors in 2024.
The company expects a significant inflection point for revenue growth in 2027-2028. They aim for a 16% margin profile in 2024, but the details are still being worked out. The earnings call concluded with a Q&A session, where the company addressed concerns about the UAW strike, foreign currency impacts, and future revenue growth in the zero-emission vehicle sector. The company also mentioned its target EBITDA margin of 16% and indicated that it is working on determining the margin profile for 2024. An Investor Day has also been announced for a future date.
InvestingPro data indicates Garrett Motion's market cap stands at $1830M USD with revenue at $3824M USD. The company's revenue growth for FY2023.Q2 was 17.69%, signifying a positive trend. For more insightful tips and real-time metrics, consider checking out InvestingPro. The platform offers numerous additional tips and metrics to help investors make informed decisions.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.