Garrett Motion Reports Q1 2025 Financial Results with $878M in Net Sales

Garrett Motion Inc. reported its financial results for the first quarter of 2025, revealing a net sales figure of $878 million, a decrease of 4% from $915 million in the same period of 2024. The decline was attributed to lower demand in diesel and commercial vehicle applications, particularly in Europe, and a decrease in replacement parts sales in North America. However, the company noted a 4% increase in gasoline product sales, driven by new program launches in North America and recovery in Japan. The gross profit for the quarter was $179 million, up from $172 million a year earlier, reflecting a gross profit margin of 20.4%, compared to 18.8% in the prior year.

In terms of operational efficiency, Garrett's cost of goods sold decreased by 5.9% to $699 million, primarily due to lower sales volumes and commodity deflation. Selling, general, and administrative expenses also saw a reduction, falling to $59 million from $64 million in the previous year. The company reported a net income of $62 million, down from $66 million in the first quarter of 2024, with an effective tax rate of 27.1%, up from 18.5% in the prior year, largely due to higher U.S. taxes on international operations.

Strategically, Garrett Motion has made significant moves to strengthen its financial position. On January 30, 2025, the company entered into a Restatement Agreement, refinancing its existing $692 million term loan and replacing it with a new facility that matures in January 2032. Additionally, the company replaced its revolving credit facility with a new $630 million agreement, maturing in January 2030. During the quarter, Garrett repurchased $30 million of its common stock under an authorized $250 million share repurchase program, leaving $220 million available for future repurchases.

Geographically, the company reported varied performance across regions, with U.S. sales at $176 million, Europe at $425 million, and Asia at $257 million. The company continues to focus on expanding its market share in turbocharging and electric vehicle technologies, securing new awards for its high-speed electric motor and fuel compressor technologies. The company is also investing in zero-emission technologies, which are expected to drive future growth.

Looking ahead, Garrett Motion anticipates continued challenges in the automotive market, particularly with geopolitical and macroeconomic factors affecting demand. However, the company remains optimistic about its strategic initiatives and product launches, which are expected to support revenue growth in the coming quarters. The management emphasized its commitment to operational efficiency and cost management as it navigates these market conditions.