Garrett Motion Inc. GTX posted first-quarter 2026 earnings of 49 cents per share, up 63.3% from 30 cents a year ago. The bottom line beat the Zacks Consensus Estimate of 43 cents, delivering a 15.4% earnings surprise. Net sales came in at $985 million, up 12.2% year over year and ahead of the consensus mark of $917 million by 7.39%. Results reflected solid demand across the portfolio and disciplined execution, with adjusted EBIT margin expanding to 15.3%.
GTX currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Garrett Motion Inc. Price, Consensus and EPS Surprise
Garrett Motion Inc. price-consensus-eps-surprise-chart | Garrett Motion Inc. Quote
GTX Sales Rise on Broad-Based Demand Tailwinds
Garrett’s top-line performance was supported by higher demand across all verticals in the quarter. The company pointed to gains in passenger vehicles and strong performance in commercial vehicle, off-highway, and industrial end markets as key contributors.
By category, reported sales increased 10% in gasoline and 12% in diesel, aided by new application launches and program ramp-ups. Commercial vehicle/industrial revenues rose 17% on strength across regions, while aftermarket sales advanced 16%, helped by demand and a favorable product mix.
Garrett Profitability Benefits
Gross profit increased to $196 million from $179 million in the year-ago quarter. However, gross margin dipped to 19.9% from 20.4%. On the cost side, the cost of goods sold rose to $789 million from $699 million, largely tied to higher volumes and unfavorable currency impacts. Headwinds from lower productivity net of labor inflation and repositioning costs, import tariffs and product mix were partly offset by lower RD&E costs and commodity, transportation and energy deflation.
Selling, general and administrative expenses edged down to $58 million from $59 million in the prior-year quarter. Management attributed the modest improvement to lower professional services, bad debt recovery and lower personnel costs, partially offset by unfavorable currency impacts.
Below operating lines, other expense declined sharply to $1 million from $7 million, aided by the absence of prior-year refinancing-related professional fees. Interest expense declined to $27 million from $29 million, while non-operating income rose to $8 million from $1 million, supported by the resolution of certain environmental liabilities and foreign exchange transactional gains.
Net cash provided by operating activities totaled $98 million in the first quarter, up from $56 million a year ago. The increase reflected higher earnings and favorable impacts from working capital changes, along with benefits from movements in other assets and liabilities.
Garrett Balance Sheet & Shareholder Returns
Garrett ended the quarter with $772 million in available liquidity, including $142 million in unrestricted cash and cash equivalents and $630 million of undrawn commitments under its revolving credit facility. Liquidity was modestly lower than the $807 million reported at the end of 2025, primarily reflecting capital returns and period cash movements. Total principal amount of debt outstanding was $1,437 million as of March 31, 2026, essentially flat with $1,439 million at the end of 2025.
The company repurchased $87 million of common shares under its authorization and declared a cash dividend of 8 cents per share, payable June 15, 2026, to shareholders of record as of June 1, 2026. Notably, remaining repurchase capacity under the company’s authorized program was $163 million as of quarter-end.
Garrett Raises 2026 Outlook After Strong Start
Reflecting the quarter’s momentum, Garrett raised its full-year 2026 outlook. The company now expects net sales of $3.6 billion to $3.9 billion versus the prior range of $3.6 billion to $3.8 billion.
The updated view calls for net income of $300 million to $360 million (up from $295 million to $335 million) and adjusted EBIT of $520 million to $600 million (compared with $520 million to $570 million). The company updated its adjusted free cash flow outlook to $355 million to $475 million from $355 million to $455 million, while reiterating RD&E investment at about 4.2% of sales and capital expenditures at about 2.5% of sales.
Key Releases From the Auto Space
General Motors GM delivered first-quarter 2026 adjusted earnings of $3.70 per share, which rose 33% year over year and topped the Zacks Consensus Estimate of $2.61. Revenues of $43.62 billion slipped 0.9% year over year and missed the consensus mark of $43.94 billion by 0.7%. Management increased full-year 2026 EBIT-adjusted guidance to $13.5-$15.5 billion (versus $13-$15 billion guided earlier) and lifted its adjusted earnings outlook to $11.50-$13.50 per share (compared with the prior forecast of $11-$13 per share). General Motors now expects gross tariff costs of $2.5-$3.5 billion in 2026, down from the prior forecast of $3-$4 billion, while maintaining its adjusted automotive free cash flow target of $9-$11 billion.
Ford F reported first-quarter 2026 adjusted earnings per share of 66 cents, which beat the Zacks Consensus Estimate of 20 cents and increased from 14 cents in the prior-year quarter. Ford’s total automotive revenues rose 6.4% year over year to $39.82 billion, which surpassed the Zacks Consensus Estimate of $39.34 billion by 1.21%. The company’s consolidated first-quarter revenues came in at $43.3 billion, up 6.4% year over year.Ford raised full-year 2026 adjusted EBIT guidance to $8.5-$10.5 billion, up from $8-$10 billion. It reiterated its adjusted free cash flow outlook at $5-$6 billion.
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This article originally published on Zacks Investment Research (zacks.com).
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