LONDON - Shares of Garrett Motion (NASDAQ:GTX) fell sharply today after the company reported second-quarter earnings that narrowly topped analyst estimates but cut its full-year revenue outlook, signaling a challenging road ahead.
The automotive technology firm posted adjusted earnings per share (EPS) of $0.28 for the quarter, marginally higher than the consensus estimate of $0.27. However, revenue for the quarter was $890 million, falling short of the expected $975.5 million and marking a 12% decline from the same period last year.
The company's updated guidance for the full year 2024 forecasts net sales of $3.57 billion, which is lower than the analyst consensus of $3.86 billion. This downward revision is the primary driver behind the stock's negative reaction, as investors recalibrate expectations in light of the company's latest projections.
Despite the revenue shortfall, Garrett Motion's President and CEO Olivier Rabiller highlighted the company's resilience amidst market volatility.
"Despite a volatile volume environment in the second quarter, Garrett delivered a very solid performance," Rabiller stated. He emphasized the expansion of the adjusted EBITDA margin to 16.9% and the generation of $62 million in adjusted free cash flow. Rabiller also noted significant progress in capital allocation, with $65 million of common stock repurchased during the quarter.
The company's focus on its core turbo business and advancements in zero-emission vehicle technologies were underscored as strategic priorities. Garrett Motion secured new series production awards and made strides in its Fuel Cell Compressor Portfolio, as well as gaining traction with its E-Powertrain solutions for commercial vehicles.
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