PHINIA Inc. Reports 3% Net Sales Increase to $890 Million in Q2 2025

PHINIA Inc. reported its financial results for the second quarter of 2025, revealing a net sales increase of 3% to $890 million compared to $868 million in the same period last year. The company's gross profit rose to $197 million, up from $188 million, while operating income increased to $89 million from $71 million. Net earnings for the quarter were $46 million, translating to earnings per share of $1.14, a significant rise from $0.31 in the prior year. For the first half of 2025, net sales totaled $1.686 billion, a decrease of 3% from $1.731 billion in the first half of 2024, with net earnings of $72 million compared to $43 million.

The company experienced notable changes in its financial performance, particularly in operating income, which increased by 25% year-over-year for the second quarter. The rise in earnings was attributed to improved supplier savings and favorable foreign currency impacts, despite challenges such as the end of contract manufacturing agreements with its former parent company, BorgWarner. Additionally, the effective tax rate decreased to 39% from 62% in the previous year, reflecting a more favorable jurisdictional mix of pre-tax earnings.

Strategically, PHINIA announced its intention to acquire Swedish Electromagnet Invest AB for approximately $47 million, a move expected to enhance its capabilities in alternative fuel ignition systems and generate an estimated $50 million in annual revenue. This acquisition aligns with the company's focus on expanding its product offerings and market share in the fuel systems sector. The company also noted that it became an independent publicly-traded entity following its spin-off from BorgWarner in July 2023, which has allowed it to streamline operations and focus on its core business segments.

Operationally, PHINIA reported a slight increase in customer engagement, with net sales in the Fuel Systems segment reaching $537 million, up from $518 million, while the Aftermarket segment saw sales of $353 million, a marginal increase from $350 million. The company’s employee headcount has also adjusted as it continues to navigate the transition to a standalone entity, with restructuring costs recorded at $2 million for the quarter. The company maintains a strong liquidity position, with cash and cash equivalents of $347 million and access to a $500 million revolving credit facility.

Looking ahead, PHINIA anticipates challenges in earnings and cash generation due to expected softening in original equipment markets, with projected declines in light vehicle volumes by mid-single digits and commercial vehicle volumes by low-single digits. Despite these challenges, the company remains optimistic about long-term growth driven by market share expansion and increased consumer interest in hybrid and alternative fuel vehicles. The management is committed to ongoing product development and strategic investments to enhance its competitive position in the market.