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PHIN Q1 Earnings Beat Estimates on Fuel Systems Strength
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Key Takeaways
PHINIA posted Q1 EPS of $1.29, up 37.2% YoY, beating estimates on strong volumes and cost control.
PHIN sales rose 10.3% to $878M, led by Fuel Systems growth and supported by tariff recoveries.
PHINIA saw growth from SEM acquisition, FX tailwinds and strong demand in Asia and the Americas.
PHINIA Inc. (PHIN - Free Report) delivered first-quarter 2026 adjusted earnings of $1.29 per share, up 37.2% year over year and above the Zacks Consensus Estimate of 92 cents by 40.2%. The upside was driven by higher volumes and disciplined cost control.
Net sales were $878 million, increasing 10.3% from the year-ago quarter and topping the consensus mark of $840 million by 4.5%. Adjusted EBITDA margin held firm at 13.1%, supported by supplier savings, overhead controls and tariff recoveries.
Fuel Systems unit led the top-line advance, with segment sales of $549 million compared with $490 million a year ago. The Aftermarket business remained a steady contributor, generating $329 million versus $306 million in the prior-year period.
PHINIA highlighted that foreign currency and the acquisition of SEM added to the quarter’s growth, while underlying demand also improved. Excluding those factors, net sales still advanced 3.6%, aided by stronger volumes in Asia and the Americas alongside tariff recoveries.
PHINIA Protects Margins With Supplier Savings
Operating income improved to $69 million from $62 million, translating to an operating margin of 7.9% versus 7.8% a year ago. Higher sales helped lift gross profit to $188 million from $172 million, though gross margin edged down to 21.4% from 21.6%.
Selling, general and administrative expenses increased to $115 million from $107 million, while restructuring expenses declined to $3 million from $5 million. Segment profitability remained differentiated, with an adjusted EBITDA margin of 9.3% in Fuel Systems versus 17% in Aftermarket, underscoring the value of the service-oriented mix.
PHIN Expands Alternative Fuel and Aerospace Wins
PHINIA continues to target strategic growth markets that diversify end-market exposure and fuel technologies. In Fuel Systems, the company won a compressed natural gas fuel rail assembly contract with a leading global OEM, marking its third consecutive quarter of a major alternative-fuel program win in India.
PHINIA also secured a jet fuel direct injector program for unmanned aerial drone engines with a new customer, leveraging its gasoline direct injector technology. Another quarter win included a direct injection fuel rail assembly with a major Chinese OEM, supporting a luxury SUV platform equipped with a dual-fuel-injection V8 engine.
PHINIA Broadens Aftermarket Reach Across Regions
In the Aftermarket business, PHINIA expanded its product portfolio with a major warehouse distributor in the Americas by adding steering and suspension and vehicle electronics, broadening an existing customer relationship. The company also added two new customers in Europe and expanded a propulsion-agnostic program within the Asia Pacific region, increasing its footprint across multiple vehicle platforms.
PHINIA also renewed a starter program with a global commercial vehicle on- and off-highway OEM, reinforcing its long-standing presence supplying starters for severe-duty and long-haul applications.
PHIN Maintains Balance Sheet Flexibility and Cash Focus
PHINIA ended the quarter with $328 million in cash and cash equivalents and $480 million of available capacity under its revolving credit facility. Total debt was $992 million.
Net cash generated by operating activities was $53 million, up $13 million from the year-ago period. Adjusted free cash flow came in at $42 million, marking a first-quarter record since becoming a standalone company, benefiting from higher earnings adjusted for non-cash charges, improved working capital and lower capital expenditures. PHINIA returned $67 million to shareholders through $56 million of share repurchases and $11 million in dividends.
PHINIA Keeps 2026 Targets Intact After Strong Start
For 2026, PHINIA continues to expect net sales of $3.52-$3.72 billion, implying year-over-year growth of 1%-7%. Net earnings are projected at $165-$195 million, while adjusted EBITDA is expected in the $485-$525 million range, with a net earnings margin of 4.7%-5.2% and an adjusted EBITDA margin of 13.7%-14.3%. The company expects adjusted free cash flow of $200-$240 million and an adjusted tax rate of 30%-34%.
Key Releases From the Auto Space
General Motors (GM - Free Report) 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 - Free Report) 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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PHIN Q1 Earnings Beat Estimates on Fuel Systems Strength
Key Takeaways
PHINIA Inc. (PHIN - Free Report) delivered first-quarter 2026 adjusted earnings of $1.29 per share, up 37.2% year over year and above the Zacks Consensus Estimate of 92 cents by 40.2%. The upside was driven by higher volumes and disciplined cost control.
Net sales were $878 million, increasing 10.3% from the year-ago quarter and topping the consensus mark of $840 million by 4.5%. Adjusted EBITDA margin held firm at 13.1%, supported by supplier savings, overhead controls and tariff recoveries.
PHINIA currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
PHINIA Inc. Price, Consensus and EPS Surprise
PHINIA Inc. price-consensus-eps-surprise-chart | PHINIA Inc. Quote
PHIN Sales Mix
Fuel Systems unit led the top-line advance, with segment sales of $549 million compared with $490 million a year ago. The Aftermarket business remained a steady contributor, generating $329 million versus $306 million in the prior-year period.
PHINIA highlighted that foreign currency and the acquisition of SEM added to the quarter’s growth, while underlying demand also improved. Excluding those factors, net sales still advanced 3.6%, aided by stronger volumes in Asia and the Americas alongside tariff recoveries.
PHINIA Protects Margins With Supplier Savings
Operating income improved to $69 million from $62 million, translating to an operating margin of 7.9% versus 7.8% a year ago. Higher sales helped lift gross profit to $188 million from $172 million, though gross margin edged down to 21.4% from 21.6%.
Selling, general and administrative expenses increased to $115 million from $107 million, while restructuring expenses declined to $3 million from $5 million. Segment profitability remained differentiated, with an adjusted EBITDA margin of 9.3% in Fuel Systems versus 17% in Aftermarket, underscoring the value of the service-oriented mix.
PHIN Expands Alternative Fuel and Aerospace Wins
PHINIA continues to target strategic growth markets that diversify end-market exposure and fuel technologies. In Fuel Systems, the company won a compressed natural gas fuel rail assembly contract with a leading global OEM, marking its third consecutive quarter of a major alternative-fuel program win in India.
PHINIA also secured a jet fuel direct injector program for unmanned aerial drone engines with a new customer, leveraging its gasoline direct injector technology. Another quarter win included a direct injection fuel rail assembly with a major Chinese OEM, supporting a luxury SUV platform equipped with a dual-fuel-injection V8 engine.
PHINIA Broadens Aftermarket Reach Across Regions
In the Aftermarket business, PHINIA expanded its product portfolio with a major warehouse distributor in the Americas by adding steering and suspension and vehicle electronics, broadening an existing customer relationship. The company also added two new customers in Europe and expanded a propulsion-agnostic program within the Asia Pacific region, increasing its footprint across multiple vehicle platforms.
PHINIA also renewed a starter program with a global commercial vehicle on- and off-highway OEM, reinforcing its long-standing presence supplying starters for severe-duty and long-haul applications.
PHIN Maintains Balance Sheet Flexibility and Cash Focus
PHINIA ended the quarter with $328 million in cash and cash equivalents and $480 million of available capacity under its revolving credit facility. Total debt was $992 million.
Net cash generated by operating activities was $53 million, up $13 million from the year-ago period. Adjusted free cash flow came in at $42 million, marking a first-quarter record since becoming a standalone company, benefiting from higher earnings adjusted for non-cash charges, improved working capital and lower capital expenditures. PHINIA returned $67 million to shareholders through $56 million of share repurchases and $11 million in dividends.
PHINIA Keeps 2026 Targets Intact After Strong Start
For 2026, PHINIA continues to expect net sales of $3.52-$3.72 billion, implying year-over-year growth of 1%-7%. Net earnings are projected at $165-$195 million, while adjusted EBITDA is expected in the $485-$525 million range, with a net earnings margin of 4.7%-5.2% and an adjusted EBITDA margin of 13.7%-14.3%. The company expects adjusted free cash flow of $200-$240 million and an adjusted tax rate of 30%-34%.
Key Releases From the Auto Space
General Motors (GM - Free Report) 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 - Free Report) 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.