Abstract
Garrett Motion Inc. will release second-quarter fiscal results on July 29, 2026 Pre-MKt; this preview highlights expected revenue growth, margins, EPS dynamics, and consensus positioning into the print.Market Forecast
Consensus embedded in recent forecasts points to revenue of 965.45 million US dollars for the current quarter, with EBIT of 140.36 million US dollars and adjusted EPS of 0.464; year over year, these imply growth of 5.17% for revenue, 4.75% for EBIT, and 27.21% for EPS. Management’s latest guidance cadence suggests a stable gross profit margin framework near the high teens to 20%, while net profitability is expected to be broadly resilient; EPS growth outpacing revenue implies modest operating leverage versus last year. The company’s core powertrain-related businesses are expected to remain constructive, with steady demand from light vehicle and commercial platforms and ongoing price/mix actions supporting gross margin stability. The most promising segment is aftermarket, which benefits from fleet aging and service cycles; revenue in the most recent quarter was 114.00 million US dollars, and its outlook implies a healthy year-over-year expansion.Last Quarter Review
Garrett Motion Inc. last quarter delivered revenue of 985.00 million US dollars, a gross profit margin of 19.90%, GAAP net profit attributable to the parent company of 95.00 million US dollars, a net profit margin of 9.64%, and adjusted EPS of 0.49, with revenue up 12.19% year over year and EPS up 63.33% year over year. Quarter on quarter, GAAP net profit rose 13.10%, reflecting disciplined cost control and healthy platform volumes. A notable financial highlight was EBIT at 137.00 million US dollars, exceeding prior estimates and reinforcing sustained operating execution. Main business revenue composition included natural gas-related at 443.00 million US dollars, diesel at 232.00 million US dollars, commercial vehicle at 181.00 million US dollars, aftermarket at 114.00 million US dollars, and other at 15.00 million US dollars, with aftermarket showing solid momentum supported by parts pricing and demand resiliency.Current Quarter Outlook
Main business trajectory and margin cadence
The latest forecasts imply Garrett Motion Inc. will post revenue of 965.45 million US dollars with adjusted EPS of 0.464 and EBIT of 140.36 million US dollars. This setup suggests mid-single-digit revenue expansion against a high base and a gross margin profile that remains anchored near the high teens to 20%, consistent with the prior quarter’s 19.90%. The run-rate indicates a modest sequential normalization from the prior quarter’s strong volumes, yet healthy orders and pricing actions should help offset mix and input-cost fluctuations.Near-term margin cadence appears supported by incremental productivity, procurement benefits, and normalized freight and logistics. The company’s ability to keep operating expense growth below revenue growth is the key driver of EPS outperformance relative to sales. If commodity and energy costs remain range-bound, the model points to stable to slightly improving conversion of EBIT to EPS despite a modest step-down in revenue from the prior quarter’s level.
At the segment level, the natural gas and diesel businesses remain the largest revenue engines. Mix will be sensitive to platform schedules among leading global OEMs, but the backlog and launch timing communicated in recent updates point to continuity in shipments. Any upside scenario would likely involve stronger-than-anticipated light-vehicle production in Europe and North America, while downside would tie to short-notice OEM schedule cuts.
Aftermarket momentum and most promising growth pocket
Aftermarket continues to screen as the most resilient growth pocket, underpinned by an aging global fleet and extended ownership cycles. With 114.00 million US dollars of revenue in the last reported quarter, the business benefits from recurring demand for service and replacement parts, which supports pricing and less cyclical volume. This segment typically carries attractive margins compared with OEM sales, aiding overall gross margin stability when OEM mix softens.Into this quarter, channel checks suggest steady orders from distributors and service networks. Inventory positions are rational, and price realization remains constructive given product differentiation and performance requirements in turbocharger components. A continuation of these trends would help protect overall gross margin even if OEM builds plateau.
Longer-term initiatives, including digital cataloging and improved availability, can incrementally lift conversion and working-capital turns. For the current quarter, the base case assumes mid-to-high single-digit year-over-year growth in aftermarket revenue, consistent with the broader guidance cadence embedded in revenue and EPS forecasts.
Stock-price swing factors this quarter
The largest swing factor is operating leverage versus consensus on a slightly lower revenue base than the prior quarter. If gross margin holds near 19%–20% and operating expense discipline persists, even a small revenue beat could translate to an EPS upside surprise, given the forecast EPS growth of 27.21% year over year. Conversely, any production softness at key OEM partners could pressure volumes and mix, testing the EBIT conversion implied by forecasts.Working-capital dynamics and cash conversion will be watched closely. Strong receivables collection and inventory management can support free cash flow, which investors will likely parse alongside any commentary on capital allocation and debt profile. Finally, any incremental updates on platform wins or launches for late 2026 could be a catalyst, as they inform the medium-term revenue base and pricing power across the portfolio.