PHIN

AUBURN HILLS, Mich., August 06, 2026--(BUSINESS WIRE)--PHINIA Inc. (NYSE: PHIN), a diversified, industrial supplier and global leader in the development of fuel systems, electrical systems, and aftermarket solutions, today announced that its Board of Directors has declared a quarterly cash dividend in the amount of $0.30 per common share, payable on September 18, 2026, to shareholders of record at the close of business on September 4, 2026. About PHINIA PHINIA is a diversified, industrial supplier and global leader in the development of fuel systems, electrical systems, and aftermarket solutions, with a strong portfolio of trusted brands that includes DELPHI®, DELCO REMY®, and HARTRIDGETM. With over 100 years of manufacturing expertise and industry relationships, PHINIA has approximately 12,500 talented employees and over 40 locations in 20 countries and is headquartered in Auburn Hills, Michigan, USA. Our systems and solutions are designed to keep combustion engines operating at peak performance across a variety of applications: medium- and heavy-duty commercial vehicle (on-road vehicles used for commercial transport classified class 4-8, 14,001 pounds or heavier), light commercial vehicle (on-road vehicles used for commercial transport classified as class 1-3, 14,000 pounds or lighter), light passenger vehicle (on-road vehicles used primarily for carrying passengers), and off-highway, industrial, and other (including construction and agricultural machinery, vocational vehicles, marine, industrial applications, power generation, and aerospace and defense). PHINIA’s service solutions include vehicle repair and replacement parts, offering both new and remanufactured products through the original equipment manufacturer dealer network and the independent aftermarket channel. By delivering high-performance solutions today and investing in advanced technologies to unlock the potential of alternative fuels in contributing to lower carbon mobility, PHINIA is shaping a more efficient and sustainable future. © 2026 PHINIA Inc. All Rights Reserved. (DELCO REMY is a registered trademark of General Motors LLC, licensed to PHINIA Technologies Inc.) Category: IR View source version on businesswire.com: https://www.businesswire.com/news/home/20260806838584/en/ Contacts IR contact:Gordon MuirVice President & [email protected] +1 574-210-5713 Media contact:Kevin PriceGlobal Brand & Communications [email protected] +44 (0) 7795 463871

PHINIA Inc. PHIN reported second-quarter 2026 adjusted earnings of $1.53 per share, which increased 20.5% year over year but missed the Zacks Consensus Estimate of $1.58 by 3.2%. Higher employee-related costs and an unfavorable product mix pressured profitability.Net sales increased 5.6% to $940 million and surpassed the consensus mark of $926 million by 1.5%. Adjusted EBITDA rose to $130 million from $126 million, while the related margin contracted 40 basis points to 13.8%. PHINIA Inc. price-consensus-eps-surprise-chart | PHINIA Inc. Quote Fuel Systems sales increased 5% year over year to $584 million. The improvement reflected foreign-currency benefits, the contribution from Swedish Electromagnet Invest AB and positive demand across selected markets.Aftermarket revenues advanced 6.6% to $356 million, supported by higher sales in the Americas. Excluding foreign exchange, SEM and tariff pass-through effects, companywide sales increased 2% from the prior-year quarter. Gross profit climbed to $216 million from $197 million, with gross margin expanding to 23% from 22.1%. However, operating income declined to $80 million from $89 million as selling, general and administrative expenses rose to $128 million from $112 million.Restructuring expenses increased to $8 million from $2 million. Adjusted EBITDA benefited by $11 million from net tariff refunds and by $3 million from SEM, but higher incentive and stock-based compensation costs and unfavorable product mix limited margin growth. Fuel Systems generated an adjusted operating income margin of 11%. The business secured a heated-tip multipoint fuel-injection program for a passenger vehicle application and a 24-volt starter program supporting a Class 8 commercial vehicle platform.The segment also won a complete common rail system program for agricultural applications. The award covers the rail, pump, injectors and electronic control unit, strengthening PHINIA’s position in the off-highway market. Aftermarket delivered an adjusted operating income margin of 17.1%, maintaining a notable profitability advantage over Fuel Systems due to consistent replacement demand supported by an aging vehicle fleet and an expanding vehicle population.The company opened vehicle-electronics distribution with a leading pan-European distributor and expanded its presence across North Africa, Eastern Europe, the Americas, China, Southeast Asia and Oceania. PHINIA introduced more than 2,650 new product stock-keeping units during the first half of 2026 and added more than 150,000 catalog cross-references. PHINIA entered into a definitive agreement to acquire stoba Group, a high-precision manufacturing specialist. The transaction is expected to close in the fourth quarter of 2026, subject to regulatory approvals and customary conditions.Stoba is expected to contribute about $80 million in annual third-party sales and $25 million in adjusted EBITDA. It expects the acquisition to add roughly 40 basis points to adjusted EBITDA margin while strengthening supply continuity and expanding exposure to off-highway, industrial, semiconductor, aerospace and defense markets. Net cash provided by operating activities rose to $91 million from $57 million. Adjusted free cash flow increased to $74 million from $20 million, reflecting inventory optimization, working-capital discipline and lower capital expenditures.As of June 30, 2026, PHINIA had $370 million in cash and cash equivalents, $450 million of revolving-credit capacity and total debt of $1.02 billion. The company returned $53 million to shareholders through $42 million of share repurchases and $11 million in dividends. PHINIA now expects 2026 net sales between $3.57 billion and $3.67 billion, down from the previous estimated range of $3.52-$3.72 billion, while retaining its midpoint. The projection implies year-over-year growth of 2-5%.Adjusted EBITDA is anticipated between $485 million and $515 million compared to the previous estimated range of $485 million to $525 million. It expects an adjusted EBITDA margin of 13.5-14.1% compared to the previous estimate of 13.7% to 14.3%. Adjusted free cash flow is projected at $210-$250 million compared to the prior outlook of $200-$240 million. The adjusted tax rate is expected between 30% and 33% compared to the previous estimated range of 30-34%. The outlook excludes potential effects from the planned stoba acquisition.PHIN currently carries a Zacks Rank #5 (Strong Sell). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. General Motors Company GM reported second-quarter 2026 adjusted earnings of $3.57 per share, up 41.3% year over year. The figure beat the Zacks Consensus Estimate of $3.13 by 14.06%. Revenues increased 1.9% to $48.03 billion and surpassed the consensus estimate of $46.56 billion by 3.15%. Strong pricing, lower costs and disciplined incentives supported results. General Motors raised its full-year adjusted EBIT guidance to $14-$16 billion from $13.5-$15.5 billion. Adjusted earnings are now projected at $12-$14 per share, up from the prior range of $11.50-$13.50.Tesla, Inc. TSLA reported second-quarter 2026 adjusted earnings of 33 cents per share, which declined 17.5% year over year. The figure missed the Zacks Consensus Estimate of 50 cents by 34%. Revenues advanced 25.5% to $28.24 billion and surpassed the consensus estimate of $25.81 billion by 9.41%. Tesla expects 2026 capital expenditures to exceed $25 billion and rise further over the next two to three years. Genuine Parts Company GPC reported second-quarter 2026 adjusted earnings of $2.15 per share, beating the Zacks Consensus Estimate of $2.10 by 2.38%. The bottom line increased 2.4% from $2.10 in the year-ago quarter. Revenues rose 6% year over year to $6.54 billion and surpassed the consensus estimate of $6.39 billion by 2.36%. Genuine Parts reaffirmed its 2026 adjusted earnings guidance of $7.50-$8 per share and total sales growth outlook of 3-5.5%. Genuine Parts ended June with $2.3 billion of liquidity, including $559 million in cash. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report PHINIA Inc. (PHIN) : Free Stock Analysis Report Genuine Parts Company (GPC) : Free Stock Analysis Report General Motors Company (GM) : Free Stock Analysis Report Tesla, Inc. (TSLA) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Image source: The Motley Fool. Thursday, July 30, 2026, at 8:30 a.m. ET Vice President and Treasurer - Gordon Muir Chief Executive Officer - Brady Ericson Chief Financial Officer - Chris Gropp Operator: Good morning, and welcome, everyone, to the PHINIA Second Quarter 2026 Earnings Call. Today's conference is being recorded. [Operator Instructions] At this time, I'd like to turn the conference over to Brady Ericson (sic) [ Gordon Muir ], Vice President and Treasurer. Please go ahead. Gordon Muir: Thank you, and good morning, everyone. We appreciate you joining us. Our conference call materials were issued this morning and are available on PHINIA's Investor Relations website, including a slide deck that we'll be referencing in our remarks. We're also broadcasting this call via webcast. Joining us today are Brady Ericson, CEO; and Chris Gropp, CFO. During this call, we will make forward-looking statements, including comments related to our 2026 guidance, which are based on management's current expectations and are subject to risks and uncertainties. Actual results may differ materially from these statements due to a variety of factors, including those described in our SEC filings. We caution listeners not to place undue reliance upon any such forward-looking statements. And with that, it's my pleasure to turn the call over to Brady. Brady Ericson: Thank you, Gordon, and thank you, everyone, for joining us this morning. I'll start with some highlights on the second quarter and some key developments in the quarter that support our strategy. Chris will then provide additional details on our second quarter results and discuss our 2026 financial outlook. We will then open up the call for questions. The second quarter developed largely as we expected with highlights including continued revenue growth from both Fuel Systems and Aftermarket, leading us to a refinement of our full year guidance. We were also excited to announce that the company has entered into a definitive agreement to acquire the stoba Group, a global technology partner specialized in high-precision components, systems and integrated solutions globally. As Slides 6 and 7 detail, stoba has operations in 4 countries, expect a run rate third-party revenue of approximately $80 million and accretive EBITDA of approximately $25 million. We expect the integration of the stoba Group to expand our exposure in off-highway, industrial and other customers and markets and drive synergistic profit expansion through supply chain ownership, integration of key capabilities and cost efficiencies. This will also add an additional aerospace and defense qualified location to our portfolio as well as greater exposure to these customers. Excitingly, these assets support the global semiconductor industry with high-performance equipment components, opening another avenue of growth and diversification. Closing of the deal is expected in the fourth quarter of 2026 and will be funded with available liquidity. Returning capital to shareholders is a key component of our capital allocation strategy. And with a healthy balance sheet, we continue paying dividends and repurchasing shares. We are confident of our operational and financial performance that allows us ongoing run rate capital returns to our shareholders. While the environment continues to evolve rapidly, our teams are managing our business well and delivered results that strengthen our long-term foundation. Our diversification across regions, customers, end markets and products helped offset variability in any single region or segment. And finally, we continue to adapt to ongoing changes in government policy governing tariffs, and as such, with expected net refunds during the quarter, with some cash settlements already received. Chris will discuss further details in her commentary. Turning to Slide 8. PHINIA continued to demonstrate resilience in a mixed macroeconomic environment. Demand conditions across key end markets remain steady, supported by durable replacement cycle fundamentals and ongoing positive results in the commercial vehicle industry. We continue to navigate ongoing geopolitical and trade-related uncertainty, tariff changes, as previously noted, shipping challenges and regional production variability. Through strong operational execution and disciplined cost management, we've managed these challenges effectively. We continued our streak of year-over-year growth in both Aftermarket and Fuel Systems segments. Total net sales in the quarter were $940 million, up 5.6% from the same period of the prior year. Excluding FX impacts, the impact of tariff recoveries and the contribution of SEM, revenue was up 2%. We reported adjusted EBITDA of $130 million for the quarter, up $4 million, representing a margin of 13.8%. Total segment adjusted operating income was $125 million or 13.3% margin. The Fuel Systems segment delivered a strong quarter with sales of $584 million, up 5% and adjusted operating margin of 11%. The Aftermarket segment had sales of $356 million, up 6.6% with adjusted operating margin of 17.1%. Adjusted earnings per diluted share, excluding nonoperating items, was $1.53 for the quarter compared with $1.27 in the same period of the prior year, a 20.5% increase year-over-year. From a balance sheet perspective, PHINIA continues to demonstrate financial stability and consistency. We exited the quarter with a cash position of $370 million and a total liquidity of $820 million. Our net leverage ratio was 1.3x, which is under our target of 1.5. We returned $53 million to shareholders in the form of share repurchases and dividends. Our balance sheet continues to provide the financial flexibility to support growth initiatives while returning capital to shareholders. In summary, while the external environment continues to evolve, we remain focused on the current and future of the business. The second quarter performance underscores the durability and resilience of our business amid a rapidly changing global environment by serving a broad mix of regions, customers, end markets and products. Moving to Slide 9. I am pleased with the success we are having with respect to gaining new business. The second quarter was another good quarter for us, reflecting continued progress across multiple fronts. Importantly, we're continuing to grow with our existing customers, adding new ones and gaining real traction in new areas of our portfolio. This quarter included notable wins across OE and aftermarket channels, reinforcing customer trust, technology differentiation and PHINIA's ability to deliver premium solutions to our customers. Launch progress on important programs in our portfolio, including aerospace, off-highway, heavy-duty truck, continue at an advanced pace, which will support our progress through the end of the decade and beyond. Key Fuel Systems wins in the quarter include a new business for a heated tip MPFI system, supporting light passenger vehicle engine application, further expanding PHINIA's alternative fuel portfolio; a 24-volt starter program supporting a Class 8 commercial vehicle platform, reinforcing PHINIA's long-standing position in the heavy-duty on-highway market; a complete common rail system program for agricultural applications, highlighting the strength of PHINIA's integrated fuel system portfolio and reinforcing our position in the growing off-highway sector. Turning to Slide 10. Our Aftermarket business continues to be a steady and reliable contributor to our results. Demand remains consistent, driven by an aging fleet and a growing vehicle park. As vehicles stay on the road longer, customers around the world rely on our quality parts and service more than ever. Our strong and recognizable brands, broad and consistently expanding product offerings and focus on customer service are helping us build deeper relationships and win new opportunities. Recent wins were across diverse geographies, further strengthening our position in the independent aftermarket. A few notable changes during the quarter include open vehicle electronic distribution with a leading pan-European distributor, significantly expanding market access across the EMEA region; expanded the global aftermarket footprint through new customer acquisitions, branch expansion and increased distribution penetration across North Africa, Eastern Europe, North and South America, China, Southeast Asia and Oceania. We introduced more than 2,650 new SKUs globally during the first half of 2026, while adding more than 150,000 cross-references to regional catalogs, expanding vehicle coverage and enhancing customer access to PHINIA products. These wins show consistent progress towards seamlessly diversifying into higher-growth end markets by leveraging our existing human and manufacturing capital. Additionally, we had several significant product launches this quarter, including a 500bar GDi system, showcasing our full system capabilities and continued leadership in advanced gasoline technologies; a fuel delivery module in India, broadening our CV portfolio and supporting growth in a key strategic market; and a next-generation GDi pump reinforcing our position in passenger and light commercial vehicle applications. Moving next to capital allocation on Slide 12. Our approach remains unchanged. We are staying disciplined and balanced and are continuing to invest in our business to support long-term growth, both organically and through strategic opportunities that strengthen our competitive position and expand our long-term opportunities. At the same time, we are committed to maintaining a healthy balance sheet and returning cash to shareholders through dividends and share buybacks, which do not slow down despite striking the deal for the stoba acquisition. This approach reflects our strong financial position, our confidence in the path ahead and our focus on long-term value creation. During the quarter, we returned $53 million to shareholders in the form of dividends and repurchases. $216 million remains under our current share repurchase authorization. Since the spinoff in July 2023 through the second quarter of this year, we repurchased $534 million worth of shares, representing approximately 24% of our original share count and paid $131 million in dividends. In total, we have returned $665 million to shareholders through share buybacks and dividends since July 2023. We've achieved all of this while keeping net leverage below our target, preserving strong liquidity and continuing to fund the growth of our business. Finally, I want to thank and congratulate all of our employees as we just surpassed our third anniversary as an independent publicly traded company. It's been a great journey so far and look forward to many more years to come. I'll now turn the call over to Chris to discuss our financial results in more detail and discuss our 2026 outlook. Chris Gropp: Thanks, Brady, and thanks to all of you for joining us this morning. As a reminder, reconciliations of all non-GAAP financial measures that I will discuss can be found in today's press release and in the presentation, both of which are on our website. In the second quarter, we delivered results in line with our expectations and that reflect both the strength of our diversified portfolio and the benefits of our operational discipline. Diving into the details, which you can find on Slides 13 and 14 of the presentation, I will bridge our revenue and adjusted EBITDA for the second quarter. Specifically, during the quarter, we generated $940 million in net sales, an increase of 5.6% versus a year ago. Compared to Q2 2025, our top line rose 2.4%, unfavorable foreign exchange of $21 million as the Chinese renminbi, euro and Brazilian real strengthened against the U.S. dollar. We saw a positive contribution from volume and mix of $18 million or 2% on positive customer pricing and higher sales in the Americas aftermarket. Revenue in the quarter was reduced from net tariff pass-through of $7 million, affected mainly by anticipated tariff refunds from the government expected to be passed through to customers who had previously reimbursed us for portions of the impact. Finally, SEM contributed sales of $18 million in the quarter. Excluding the FX impact, SEM contribution and tariff pass-throughs, sales were up 2% in the quarter. Moving next to the bridge on Slide 14. Adjusted EBITDA was $130 million in the quarter with a margin of 13.8%, representing a year-over-year increase of $4 million and a 40 basis point decrease in margin. Net tariff expense and anticipated refunds were an $11 million contribution to earnings in the quarter. Contribution from SEM was $3 million or a 16.6% margin in the quarter. Product mix, partially offset by supplier savings and cost control measures, was a $1 million headwind. Other costs, including corporate costs, were up approximately $9 million, primarily due to adjustments for short- and long-term incentive compensation. All changes are related to previously published incentive compensation schemes for PHINIA associates, which reward improvements in economic value and the cash generation of the business. We continue to effectively execute our disciplined capital allocation strategy, successfully balancing significant cash return to shareholders with the potential for strategic accretive M&A. Cash and cash equivalents at quarter end were $370 million, while available capacity under our credit facility was approximately $450 million for a resulting liquidity of $820 million. Cash flow from operations was $91 million, an increase of $34 million over second quarter 2025. Adjusted free cash flow was $74 million, with capital expenditures of 2.3% coming in below our target of 4% and efficient uses of working capital in the quarter, including approximately $1 million in cash tariff refunds received. Share repurchases and dividends represented our primary use of capital with value back to our shareholders of $42 million and $11 million, respectively, in the quarter for year-to-date totals of $98 million and $22 million, respectively. As Brady noted, we announced the purchase of stoba Group in late June with an expected close date of Q4 2026, dependent upon normal regulatory approvals and customary closing conditions. With a purchase price of approximately 6x EBITDA, we expect the inclusion of the business to be accretive on a run rate EBITDA basis, adding approximately 40 basis points on an annual basis. While full stoba Group sales were approximately $200 million, this balance includes sales to PHINIA operations, which upon consolidation are eliminated as intercompany sales. On a third-party basis, this asset will add full year sales of approximately $80 million and $25 million or 31% in adjusted EBITDA. We are excited to welcome the group into the PHINIA family, strengthening capabilities, expertise and future growth opportunities in multiple markets and product lines. We continue to generate strong free cash flow, supporting our near- and long-term capital allocation priorities. Our broadening portfolio of products, solutions and services, coupled with our healthy balance sheet, will enable us to continue to deploy capital with discipline, focused on delivering long-term sustainable profitable growth, creating value for our shareholders. Moving next to Slide 15 to comment on our 2026 outlook. As we move through the year, we're refining the full year guidance we issued earlier this year. Specifically, we're tightening the range of revenue while keeping the midpoint of our revenue outlook range. At $3.57 billion to $3.67 billion, we would expect an increase in net sales in the mid-single-digit range, inclusive of FX. Excluding expected FX, our growth is projected to be in the low single-digit area. We are now guiding adjusted EBITDA to be $485 million to $515 million, with an EBITDA margin of 13.5% to 14.1% as sales impacts from FX and net tariff recoveries as well as product mix have had a slightly dilutive impact on margins. We believe the business is well positioned to continue generating meaningful free cash flow, and we've updated our 2026 outlook for adjusted free cash flow to $210 million to $250 million. We expect the adjusted tax rate to be in the 30% to 33% range as meaningful progress has been made in addressing legacy tax structure headwinds. Overall, we expect to continue to deliver strong results in 2026 as we drive operational efficiencies and search for new areas of growth for both segments. As a reminder, our outlook does not account for potential impacts from changes related to the announced stoba acquisition in addition to recent or future government policy changes or other risks described in our filings with the SEC that could influence our operations or technical centers. This includes measures such as additional tariffs, tax reforms or any other policies that might either increase or decrease our revenue assumptions and/or alter our cost structure. With that said, we believe PHINIA is well positioned to navigate global market conditions and changes, and we are confident in our operations and our ability to generate sufficient cash for our needs while also continuing to invest in the future. As we look forward to the rest of the year, we look forward to managing the business as demand, risks and opportunities develop while providing solid returns to our shareholders. We want to thank you all for joining us on this call today, and we are ready to open up the call to questions. Operator, please open the lines. Operator: [Operator Instructions] We'll go to our first question from Christian Zyla at KeyBanc Capital Markets. Christian Zyla: First question for me is just on the guide lower amid what seems like a positive backdrop. So LPV might be better than expected on higher volumes and/or mix. Commercial vehicle orders in the last 3 months have been positive. The industrial backdrop on IP and PMI is positive. So just can you kind of frame out like how much of the guide down, kind of, as we think about 2026 and then even into '27, like how much is that positive backdrop weighing like the guide down? I'm just trying to kind of square those two. Brady Ericson: Yes. I mean from a revenue standpoint, we kept it flat. And so really no change. We're always expecting the back half of the year to be a little bit stronger than the first half. CV, as you mentioned, is looking a little more positive. I think light vehicle globally a little bit weaker, seeing some weakness in China light vehicle market. I think you see that local market down in the mid-teens. So seeing some challenges there. But all in all, we kept our overall revenue flat or guide flat. Chris Gropp: Let me add one area, Christian. The tariff refunds that we're getting, there's a big chunk of those, in fact, about half of what we booked will go back to customers. That's a reduction in sales. So that's about a $7 million hit on the revenue. It's not extremely material, but that is also an effect that we did not have at the beginning of the year. Christian Zyla: Got it. And then for my follow-up, if I can just ask about stoba. So is the right way to think about the incorporation of the business, like $80 million in sales and, I don't know, $10 million in EBITDA? Or is there something special to think about in terms of the EBITDA dollars that you get from the deal? Brady Ericson: No, you have the right -- $80 million is the revenue, the $25 million is the EBITDA. And it's just the -- because again, we've got $120 million of revenue that was from stoba to PHINIA. And when it gets eliminated as intercompany, but we still have the profit from it. And so the right way to look at it is $80 million of additional revenue, $25 million of EBITDA. And that's why Chris kind of highlighted that given that, it's actually going to be EBITDA margin accretive by close to 40 basis points. Operator: We'll move next to Jake Scholl at BNP Paribas. Thomas Scholl: Can you provide a little bit more detail on what drove your decision to acquire stoba? And then how should we think about potential synergy-driven upside to that $25 million in EBITDA? Brady Ericson: Yes. I mean, stoba has some really unique operational capabilities and manufacturing. They were obviously a key supplier to us. We've known them for a long time, and this is also part of our kind of just making sure we have a stronger supply base, and we're protecting our customers. They were obviously a small organization, only $200 million of sales roughly. And we thought this kind of made sense to solidify our own manufacturing capabilities as well as opening up additional customers for us. And so one of their sites is aerospace and defense certified. So that's going to open up some additional customers there. They have customers that we currently don't support. So I think that's going to be an interesting opportunity there. And then finally, I think as far as synergy, the $80 million and the $25 million is what we expect them to be relatively quickly. As with the SEM, that also includes some dissynergy to bring them kind of up to speed to our capabilities and systems and processes and controls. And so that kind of considers some of the synergy as well as the dissynergy. I think longer term, we see opportunities for higher growth. And again, from our standpoint, it solidifies our supply base and our manufacturing supports our customers, expands their off-highway and industrial and other kind of exposure end markets at a fair valuation. And we think the longer term, there may be some synergies that we'll be able to get from them as well. So we thought it was a nice acquisition and a nice tuck-in for us. Thomas Scholl: Then could you guys just help us understand the bridge to $10 million in higher free cash this year? And then as we look at stoba's customized machinery business, it looks like they provide or they could provide a lot of the precision and laser machine equipment that you guys use. So does stoba make up a material portion of the CapEx? And is there potentially an outsized free cash impact from the deal? Brady Ericson: I think they can help us on the equipment side. They do some of their own machine building, and that's what some of their capabilities are, and that's some of the equipment that we need as well. So there's some additional synergies there. I think you see from the cash side, I think that it continues to be a real positive story. I think you see our working capital as a percent of our revenues kind of continue to be improved. The team is doing a good job managing that working capital. Cash tax rate continues to come down a little bit. And again, that's CapEx coming in a little bit lighter that's helping our cash flow as well. So there's a lot of little different things that are going into it. But I think in general, from our -- as Chris mentioned, from the employee costs and the short-term incentives for the employees, economic value is around being more efficient. And that's driving the teams to really drive operating investment down, questioning some of the CapEx and the investments, ensuring we keep our working capital down. And with the increased profitability of the business, they're doing a nice job there. And with that improved working capital and being more efficient, that drives additional cash flow as well. And so that's why we've increased that. If you see our first half of the year so far, we're at over $100 million. So I think we're a large chunk ahead of where we were -- close to $80 million, I think, above where we were last -- through the first half of the year. So the team is doing a really nice job there. I do think we have some timing benefits that got pulled into Q2 that's giving us some benefits. But I think the team is really focused on generating strong cash, and that's allowed us to continue to return money to shareholders and support an acquisition at the same time. Operator: [Operator Instructions] We'll go next to Joe Spak at UBS. Joseph Spak: Maybe just a couple of clarification points. So first on stoba. Is the right way to think about this like -- because I know you're saying it's margin-accretive, but when it was stand-alone, it was like 12.5% margin. Is the right way to think about this, it's like $10 million of EBIT to external and then like $15 million of vertical integration savings? Brady Ericson: Yes, that's probably a fair way to say it. Joseph Spak: Okay. So that's how you get to being sort of margin-accretive because you're basically you're saying, right, the sales don't count, but then you get some vertical integration savings? Chris Gropp: Yes. Joseph Spak: Okay. Okay. And then the tariff recovery that helped by $11 million in the quarter, was there always an expectation in your outlook of a tariff recovery? And I guess, similarly, like the employee compensation you're mentioning, was that also what was previously baked into the outlook? And then maybe is there any more of either left in the back half? Chris Gropp: All right. I'll start off, maybe you're... Brady Ericson: I don't think -- Chris Gropp: Or do you want to go or... Brady Ericson: All right, Chris. Chris Gropp: I'll get started and then you can fill in, if I can now remember the questions. Let me go back. The tariffs that we're recovering, these are the IEEPA. The majority of it this quarter was the IEEPA. And no, that was not in guide because it was quite unclear, obviously, until the Supreme Court decision. So it wasn't until some people started the GM4 and started booking some at the end of Q1. For us, it wasn't clear until we started doing the filings with customs and what was going to be coming back in, and then we actually started getting cash in. Once all of the -- what they call K1, 2 and 3 were put in and accepted then working -- we felt confident it's estimable, it's probable. We know we're going to get those in. And we also know how much we will then have to refund to our customers who funded those upfront. So no, that was not anticipated in the original guide. And on the -- then the bonuses, yes, we did have a lot of that baked in, but there's one item, there's the stock comp, and it's not massive, but about $2 million in the first half of the year on our stock comp, which -- because our stock price is higher, we needed to revalue that and bump it up. The rest of it is on bonuses. We are bumping those up. We had target bonuses in our original guide and our expectations. However, because the teams have really been working on working capital and cash flow, which are big components of our overall EV, economic value models, and our -- their merit to know what they have to achieve, that we had to bump that up. So it's not going to be over -- we will be booking additional in the back half of the year, but not materially more than we have in this half of the year unless we have even higher increases. Joseph Spak: Okay. So maybe just to summarize then, if we think about your full year guidance, the good guy relative to prior is the tariff, which wasn't in there, but that's at least partially offset or I guess, maybe more than offset by those higher compensation costs. Those are the two changes? Or are we missing any other factors? Chris Gropp: Those are the material ones. So yes, going into the back half, we will not have additional IEEPA. However, in the back half, we do have additional global supply chain savings and other productivity improvements that will offset any additional bonuses. Joseph Spak: Okay. So maybe that answers my last question, which was, like, if we back out the tariff gain, the $11 million in the quarter, then it does seem like margins step up about 100 basis points half-over-half on flat sales, but it's driven by what you just mentioned, which is the productivity? Chris Gropp: Yes. Yes. Operator: We'll take our next question from Bobby Brooks at Northland Capital Markets. Robert Brooks: I thought something that was very meaningful from stoba acquisition is that it has an A&D qualified location. And so I was curious to hear more on that. Does it already have the right type of capital equipment installed there to fulfill your current programs that you're on? Where is the location? And how much slack capacity is available there? Brady Ericson: Yes. From their A&D location, yes, we're excited about that one, too, that gives us the second one that's actually in Germany. As we kind of highlighted, there's 7 manufacturing sites in the U.K., China, Czech Republic and Germany. The bulk of those are in Germany, close to their customers, which we think is good as well because I think with the increased investment in A&D in Europe, I think being in France and Germany is going to be one of the requirements. We think they have plenty of capacity. So all of it is already kind of installed. Obviously, they do a lot of detailed machining, as you see from one of the pictures there. It's a very advanced process. But we think we're going to be able to utilize some of their excess capacity as well to kind of help our global business as well. So we're not concerned about having significant additional capital to meet those needs, and we think they're in a really spot for us. Some of those customers, the [ Wilbers ], even the Dyson, the ZF, the Dysons, there's a lot of different customers out there that are going to be new for us that's going to allow us to open up additional opportunities with them. So we're kind of really excited about that opportunity as well. Do you have anything? Robert Brooks: Yes, that was very helpful. I guess just kind of double-clicking on that. Of the $80 million that were third-party sales for stoba, just curious to hear how much of that, like, the split of off-highway, industrial aerospace or other similar companies to yourself? Just curious to get a sense there. Brady Ericson: Yes. I mean we're not -- we don't have the exact details that we're going to share. But again, it's going to increase our percentage of off-highway, industrial and other as a percent of revenues. There is a decent chunk with some of our competitors and/or peers. And so there's a little bit of risk there, but not one that we're overly concerned with. We want to continue to support them, and we'll firewall off that to protect their IP. But we see it as a nice opportunity. And again, those customers I just highlighted are new for us in our group, and we think it's going to be exciting to continue to grow with them. But it should help us in our focus of expanding our commercial vehicle, off-highway, industrial and other as a percent of our revenues. Robert Brooks: Got it. And I apologize, this -- kind of already touched on this, but, obviously, the 23% gross margins you posted in the second quarter, those were a record for the company since going public. And I believe some of that -- there is some benefit baked in there from the tariff recoveries. And I know it's like $11 million was a benefit in the quarter. But just curious like how much of that helped drive those record gross margins. And it seems like volume was a benefit, but so just curious to hear if you could touch on any other factors that led to the strength there because I thought that was a meaningful number. Brady Ericson: Yes. I mean, you saw from both the Fuel Systems and the Aftermarket, operating income was really strong. I think the SG&A and some other items where all the employees was more of the headwind. From a gross margin, again, I think they're doing well. I guess, Chris, if you want to answer that one as far as the flow-through of the net tariff because it did affect our sales as well. Chris Gropp: Yes. And probably hit it. But on the tariffs, so the IEEPA portion of the tariffs was $7 million benefit, and then the rest would be just the other -- the normal tariff pass-through that we're getting -- benefit that we get as we've been doing for the last number of quarters. But then the other -- I mean material is SEM certainly contributed. They weren't in there last year, and they came in at just short of 17% AOI in the quarter. So that was another positive that you would have to add in that's a benefit and will be an ongoing benefit, obviously. Robert Brooks: Got it. And then just last one for me. Obviously, shareholder returns have been a key story for you guys and have been robust. But should folks expect buybacks might subside a bit with the pending stoba closing? Or just any color on your thoughts there? Brady Ericson: I mean, as I highlighted in the script as well, we don't see this as affecting our capital allocation strategy. I think we're still at 1.3 I think is what we ended the quarter at. The stoba acquisition is going to add additional EBITDA as well. So it's going to help us from an EBITDA perspective on a run rate basis. And so we still think that if we see a good opportunistic share to repurchase, we'll continue to do that. So there's nothing that's going to materially change how we've been acting. Operator: We'll go to a follow-up from Christian Zyla at KeyBanc Capital Markets. Christian Zyla: Just one question kind of generally. I guess, how long were you guys courting stoba? Like was this part of the pipeline or did this kind of recently come into your lap? And then just as we think about SEM and stoba, more of these like tuck-in companies, is your pipeline -- does your pipeline have more of these little tuck-ins? Or with the first two, should we kind of expect a little bit of a lull in future deals and M&A activity? Brady Ericson: No. I think we've got -- we've been talking with stoba for a while about this. Again, with any acquisition, I'd say most acquisitions will take probably close to a year from initial conversations to getting alignment on agreeing on a path forward and agreeing on a price and then going through a due diligence process. And so I'd say all acquisitions, there's nothing that's going to be falling into lap that's going to happen real quickly. As far as the pipeline is concerned, there's still a very robust pipeline. And again, I think we continue to pursue options. Our kind of M&A team is extremely busy, vetting a lot of different options. There's still a strong pipeline. It's always just ensuring that it meets our criteria as far as enhancing our commercial vehicle and off-highway business, industrial, other aftermarket type areas, and it's at a price that makes sense. And so from our standpoint, we still have a large pipeline of companies out there. Some of them, we continue to have discussions with. Other ones we have on the monitor list saying, hey, let's wait for that right time or when they're ready, we'll be ready. So it's still pretty active. I don't see any lull in any activity in our group. Operator: And with that, that concludes our Q&A session. I will now turn the conference back over to Brady for closing remarks. Brady Ericson: Great. Thanks, everyone, and thanks for the great questions. We feel we delivered a really strong start to the year, reflecting the benefits of our diversified portfolio, our disciplined execution and the strength of the markets we serve. I want to thank our teams around the world for their continued commitment and execution. We began the year with solid results, remain focused on delivering consistent growth, expanding profitability and building a stronger PHINIA for the long term. Thank you for joining us this morning, and have a nice day. Operator: And this concludes today's conference call. Thank you for your participation. You may now disconnect. Before you buy stock in Phinia, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Phinia wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $386,727!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,232,139!* That performance is why people listen. With a track record of beating the S&P 500 by 4x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. See the 10 stocks » *Stock Advisor returns as of August 3, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool recommends Phinia. The Motley Fool has a disclosure policy. Phinia (PHIN) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Make better investment decisions with Simply Wall St's easy, visual tools that give you a competitive edge. PHINIA (PHIN) drew fresh attention after reporting second quarter 2026 earnings, issuing refined full year guidance, and announcing an agreement to acquire precision components supplier stoba Group, a combination that reshapes the near term story for the stock. See our latest analysis for PHINIA. PHINIA's recent earnings release and the stoba Group deal landed after a period where the stock had cooled off, with the 30 day share price return down 5.82% and the 7 day share price return down 6.12%. Even so, the year to date share price return of 13.83% and a 1 year total shareholder return of 51.29%, alongside a 3 year total shareholder return of about 182%, point to momentum that has been building over a longer window as investors reassess growth prospects and risks. If PHINIA's move has you rethinking where you might find the next opportunity, it could be worth widening the lens to a curated set of strong operators and check out 18 top founder-led companies PHINIA now sits at a double discount, trading below both analyst targets and some intrinsic value estimates after a pullback on mixed earnings. Is the market rightly cautious, or is it underpricing the stoba deal and guidance reset? PHINIA's most followed narrative sets a fair value of $92 per share, above the last close at $73.59, which frames the current pullback as a valuation gap rather than a complete change in story. Read the complete narrative. Want to see what sits behind that $92 figure? The narrative leans on measured revenue gains, fatter margins, and a future earnings multiple that assumes real progress. Curious which specific growth and profitability targets have to line up for PHINIA to get there. Result: Fair Value of $92 (UNDERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, PHINIA still faces meaningful questions around its heavy reliance on internal combustion technologies, as well as the execution risk tied to shifting toward hydrogen and other alternative fuels. Find out about the key risks to this PHINIA narrative. The earlier narrative leans on PHINIA looking undervalued against fair value estimates. On simple earnings maths it is a different picture. The stock trades on a P/E of 20.2x, above both its peer average at 14.6x and the US Auto Components industry at 20x, and also above a fair ratio of 15.4x that the market could move toward over time. That kind of gap can be a reward if growth delivers, but it can also leave less room for error. Which side of that trade off feels more realistic to you right now See what the numbers say about this price — find out in our valuation breakdown. With PHINIA pulling mixed reactions, it helps to see both the caution and the optimism side by side before making any move. If you want the full context, including what worries some investors and what excites others, check out the 4 key rewards and 3 important warning signs Do not stop your research with PHINIA. Broader ideas can sharpen your judgment, highlight trade offs more clearly, and keep you from relying on a single stock story. Target potential mispricing by scanning 55 high quality undervalued stocks that pair reasonable valuations with solid underlying fundamentals. Strengthen your income game by reviewing 9 dividend fortresses that focus on higher yields supported by underlying business performance. Protect your downside by comparing 81 resilient stocks with low risk scores that aim to balance return potential with more measured risk profiles. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include PHIN. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

This article first appeared on GuruFocus. Revenue: Total net sales of $940 million, up 5.6% year-over-year; excluding FX, tariff recoveries, and SCM contribution, revenue was up 2%. Adjusted EBITDA: $130 million, up $4 million year-over-year, with a margin of 13.8%. Segment Adjusted Operating Income: Total segment adjusted operating income of $125 million, or 13.3% margin. Fuel Systems Segment Sales: $584 million, up 5%, with an adjusted operating margin of 11%. Aftermarket Segment Sales: $356 million, up 6.6%, with an adjusted operating margin of 17.1%. Adjusted EPS: $1.53 per diluted share, up 20.5% year-over-year from $1.27. Cash Flow: Cash flow from operations of $91 million, up $34 million year-over-year; adjusted free cash flow of $74 million. Capital Expenditures: 2.3% of sales, below the 4% target. Shareholder Returns: Returned $53 million to shareholders in Q2 ($42 million in share repurchases and $11 million in dividends). Balance Sheet: Cash position of $370 million, total liquidity of $820 million, and net leverage ratio of 1.3 times. 2026 Guidance: Revenue expected at $3.57 billion to $3.67 billion; adjusted EBITDA guided to $485 million to $515 million; adjusted free cash flow outlook of $210 million to $250 million. Warning! GuruFocus has detected 4 Warning Sign with PHIN. Is PHIN fairly valued? Test your thesis with our free DCF calculator. Release Date: July 30, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Phinia Inc (NYSE:PHIN) reported strong Q2 2026 results with net sales up 5.6% year-over-year to $940 million and adjusted EPS up 20.5% to $1.53, driven by growth in both Fuel Systems and Aftermarket segments. The company announced the accretive acquisition of The Stoba Group, expected to add $80 million in third-party revenue and $25 million in EBITDA, expanding exposure in off-highway, industrial, and aerospace/defense markets. Phinia Inc (NYSE:PHIN) continues to return significant capital to shareholders, having returned $665 million since the spin-off in July 2023, including $53 million in Q2 2026, while maintaining a healthy balance sheet with net leverage of 1.3x. The company secured notable new business wins across fuel systems and aftermarket, including a heated tip NCFI system, a 24-volt start-up program for Class 8 trucks, and a complete common rail system for agricultural applications. Phinia Inc (NYSE:PHIN) delivered strong cash flow with Q2 operating cash flow of $91 million and adjusted free cash flow of $74 million, leading to an increased full-year 2026 adjusted free cash flow guidance of $210-$250 million. The company's diversified portfolio and operational discipline helped offset regional and segment variability, with Aftermarket segment achieving a 17.1% adjusted operating margin and Fuel Systems at 11%. Phinia Inc (NYSE:PHIN) faced a $21 million unfavorable foreign exchange impact in Q2 2026, primarily due to the strengthening of the Chinese renminbi, euro, and Brazilian real against the US dollar. The company's full-year 2026 adjusted EBITDA guidance was refined to $485-$515 million, with margins slightly diluted due to FX impacts, net tariff recoveries, and product mix. Phinia Inc (NYSE:PHIN) experienced a $7 million reduction in revenue from net tariff pass-throughs, as anticipated tariff refunds were passed back to customers who had previously reimbursed the company. Other costs, including corporate costs, increased by approximately $9 million in Q2 2026, primarily due to adjustments for short and long-term incentive compensation, which were not fully anticipated in the original guidance. The company noted weakness in the global light vehicle market, particularly in China, where the local market is down in the mid-teens, which could impact future demand. Phinia Inc (NYSE:PHIN) expects the Stoba acquisition to close in Q4 2026, subject to regulatory approvals, and the guidance does not account for potential impacts from the deal or future government policy changes, adding uncertainty. Q: Can you provide more detail on what drove the decision to acquire Stoba Group and how we should think about potential synergy-driven upside to the $25 million in EBITDA? A: Brady Ericson (CEO): Stoba has unique operational manufacturing capabilities and is a key supplier to us. The acquisition solidifies our supply base, protects our customers, and opens up additional customers and markets. One of their sites is aerospace and defense certified, which opens up new customers. The $80 million in sales and $25 million in EBITDA is what we expect relatively quickly, including some dis-synergies to bring them up to speed with our systems. Longer-term, we see opportunities for higher growth and synergies, making it a nice tuck-in acquisition at a fair valuation. Q: Is the right way to think about the Stoba acquisition as $80 million in sales and $10 million in EBITDA, or is there something special to consider regarding the EBITDA dollars? A: Brady Ericson (CEO): You have it right$80 million is the revenue and $25 million is the EBITDA. The $120 million of revenue from Stoba to Phinia gets eliminated as intercompany, but we still retain the profit. This is why the EBITDA margin is accretive by close to 40 basis points. Q: The tariff recovery helped by $11 million in the quarter. Was this always expected in your outlook, and were the higher employee compensation costs also previously baked in? A: Chris Gropp (CFO): The tariff recoveries, primarily from IEPA, were not in the original guide because it was unclear until the Supreme Court decision. We only started booking them once we felt confident they were estimable and probable. The compensation costs were partially baked in, but we had to bump up bonuses because teams have been excelling at working capital and cash flow management, which are big components of our economic value models. We will book additional bonuses in the back half, but not materially more than the first half. Q: How much of the guide-down is due to the positive backdrop, and how should we think about the revenue and margin impacts? A: Brady Ericson (CEO): We kept revenue guidance flat. We always expected the back half to be stronger. Commercial vehicle is looking more positive, but light vehicles globally are weaker, especially in China, which is down mid-teens. Chris Gropp (CFO): Additionally, about half of the tariff refunds we booked will go back to customers, which is a $7 million reduction in sales that we didn't have at the beginning of the year. Q: The Stoba acquisition includes an A&D qualified location. Does it already have the right capital equipment installed, and how much slack capacity is available? A: Brady Ericson (CEO): Yes, we're excited about the A&D location in Germany, which gives us a second one. The bulk of their seven manufacturing sites are in Germany, close to their customers, which is good given increased A&D investment in Europe. They have plenty of installed capacity, and we can utilize their excess capacity to help our global business without significant additional capital. This opens up new customers like Liebherr, ZF, and others. Q: The 23% gross margins were a record for the company. How much of that was driven by tariff recoveries, and what other factors contributed? A: Chris Gropp (CFO): The IEPA portion of the tariffs was a $7 million benefit, with the rest from normal tariff pass-through. SEM also contributed, coming in at just short of 17% AOI in the quarter, which is an ongoing benefit. Brady Ericson (CEO): Both fuel systems and aftermarket operating income were strong, with SG&A and employee costs being the main headwinds. Q: Should shareholders expect buybacks to subside with the pending Stoba closing? A: Brady Ericson (CEO): No, we don't see this affecting our capital allocation strategy. We ended the quarter at 1.3x net leverage, and the Stoba acquisition will add additional EBITDA, helping from a leverage perspective. If we see opportunistic share repurchase opportunities, we'll continue to act. Nothing will materially change our approach. Q: How long were you courting Stoba, and does your pipeline have more tuck-in acquisitions like SEM and Stoba? A: Brady Ericson (CEO): We've been talking with Stoba for a whilemost acquisitions take close to a year from initial conversations to agreement. Our M&A pipeline remains robust, and our team is busy vetting options. We continue to pursue companies that enhance our commercial vehicle, off-highway, industrial, and aftermarket areas at prices that make sense. There's no lull in activity. Q: Can you help us understand the bridge to higher free cash flow this year and whether Stoba's machinery business could provide an outsized free cash impact? A: Brady Ericson (CEO): Stoba can help on the equipment side as they build their own machines, providing synergies. Our cash story is positiveworking capital as a percent of revenue continues to improve, cash tax rates are coming down, and CapEx is lighter. Employee incentives are tied to economic value, driving efficiency. We're ahead of last year through the first half, with some timing benefits pulled into Q2, but the team is focused on generating strong cash to support shareholder returns and acquisitions. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Interested in PHINIA Inc.? Here are five stocks we like better. Second-quarter results improved: Revenue rose 5.6% year over year to $940 million, while adjusted EBITDA increased to $130 million and adjusted EPS climbed 20.5% to $1.53. Fuel Systems sales grew 5% and Aftermarket sales rose 6.6%. PHINIA agreed to acquire stoba Group in a deal expected to close in the fourth quarter of 2026. The acquisition is expected to add approximately $80 million in annual third-party revenue and $25 million in adjusted EBITDA while expanding exposure to aerospace, defense, industrial and off-highway markets. The company tightened its 2026 outlook to $3.57 billion-$3.67 billion in revenue, $485 million-$515 million in adjusted EBITDA and $210 million-$250 million in adjusted free cash flow. PHINIA also returned $53 million to shareholders during the quarter through buybacks and dividends. PHINIA (NYSE:PHIN) reported second-quarter revenue growth in both its fuel systems and aftermarket businesses, while announcing an agreement to acquire precision-components supplier stoba Group and refining its full-year outlook. Chief Executive Officer Brady Ericson said the quarter developed “largely as we expected,” citing continued growth across the company’s two operating segments. Net sales rose 5.6% year over year to $940 million. Excluding foreign exchange effects, tariff recoveries and the contribution from SEM, revenue increased 2%. → Why SK hynix Could Be the Best AI Chip Stock to Buy Now Adjusted EBITDA increased $4 million from the prior-year period to $130 million, representing a 13.8% margin. Adjusted diluted earnings per share, excluding non-operating items, rose 20.5% to $1.53 from $1.27 a year earlier. Fuel Systems sales rose 5% to $584 million during the quarter, with an adjusted operating margin of 11%. The Aftermarket segment recorded sales of $356 million, up 6.6% from a year earlier, and an adjusted operating margin of 17.1%. → Microsoft Just Flipped the AI Spending Narrative Overnight Ericson said the company continued to benefit from replacement-cycle fundamentals and positive conditions in commercial vehicles, while navigating geopolitical and trade uncertainty, shipping challenges and regional production variability. Chief Financial Officer Chris Gropp said foreign exchange created a $21 million headwind to quarterly sales as the Chinese renminbi, euro and Brazilian real strengthened against the U.S. dollar. Volume and mix added $18 million, supported by customer pricing and higher Americas aftermarket sales. SEM, meanwhile, contributed $18 million in revenue. → Carrier Earnings Could Send the Stock to a New All-Time High Net tariff pass-through reduced quarterly revenue by $7 million, primarily reflecting anticipated government tariff refunds that PHINIA expects to pass through to customers that had previously reimbursed the company for portions of the tariff impact. On profitability, Gropp said net tariff expense and anticipated refunds contributed $11 million to earnings in the quarter. SEM contributed $3 million of adjusted EBITDA, representing a 16.6% margin. Product mix was a $1 million headwind, partially offset by supplier savings and cost-control measures, while other costs increased by about $9 million, largely due to short- and long-term incentive compensation adjustments. PHINIA entered a definitive agreement to acquire stoba Group, a global technology partner specializing in high-precision components, systems and integrated solutions. The transaction is expected to close in the fourth quarter of 2026, subject to regulatory approvals and customary closing conditions, and will be funded with available liquidity. stoba operates in four countries and has seven manufacturing sites in the U.K., China, the Czech Republic and Germany. PHINIA expects the acquired business to add about $80 million in annual third-party revenue and approximately $25 million in adjusted EBITDA on a run-rate basis. The company said stoba’s total sales are approximately $200 million, but roughly $120 million represents sales to PHINIA that will be eliminated upon consolidation as intercompany revenue. Gropp said the purchase price was approximately six times EBITDA and that the transaction is expected to be accretive to PHINIA’s run-rate EBITDA margin by about 40 basis points annually. During the question-and-answer session, Ericson said the business provides specialized manufacturing capabilities, strengthens PHINIA’s supply base and may support longer-term growth and operational synergies. The acquisition is also expected to expand PHINIA’s presence in off-highway, industrial, aerospace and defense markets. Ericson noted that stoba has an aerospace-and-defense-qualified facility in Germany, along with installed capacity that PHINIA expects to use without significant additional capital investment. stoba also supports semiconductor equipment with high-performance components, creating another diversification opportunity, according to PHINIA. Ericson highlighted several new fuel-system wins, including a heated-tip multi-point fuel injection system for light passenger vehicles, a 24-volt starter program for a Class 8 commercial vehicle platform, and a complete common-rail system program for agricultural applications. In the aftermarket business, PHINIA expanded distribution through a Pan-European distributor and added customer acquisitions, branch expansion and distribution penetration across North Africa, Eastern Europe, the Americas, China, Southeast Asia and Oceania. The company introduced more than 2,650 new stock-keeping units globally in the first half and added more than 150,000 cross-references to regional catalogs. PHINIA also cited product launches including a 500-bar gasoline direct injection system, a fuel-delivery module in India and a next-generation GDI pump. PHINIA ended the quarter with $370 million in cash and cash equivalents and approximately $820 million in total liquidity, including available capacity under credit facilities. Its net leverage ratio was 1.3 times, below its target of 1.5 times. Cash flow from operations increased $34 million year over year to $91 million, while adjusted free cash flow was $74 million. Capital expenditures were 2.3% of sales, below the company’s 4% target. The company returned $53 million to shareholders in the quarter, including $42 million in share repurchases and $11 million in dividends. Since its July 2023 spinoff through the second quarter of 2026, PHINIA said it has repurchased $534 million of shares and paid $131 million in dividends, for total shareholder returns of $665 million. For 2026, PHINIA tightened its revenue outlook to a range of $3.57 billion to $3.67 billion, retaining the midpoint of its previous forecast. The company expects mid-single-digit reported sales growth, including foreign exchange, and low-single-digit growth excluding expected foreign exchange effects. PHINIA now expects adjusted EBITDA of $485 million to $515 million, equating to a margin of 13.5% to 14.1%, and adjusted free cash flow of $210 million to $250 million. The outlook does not include potential effects from the stoba acquisition or future government policy changes, including tariffs or tax reforms. PHINIA Inc engages in the development, design, and manufacture of integrated components and systems that optimize performance, increase efficiency, and reduce emissions in combustion and hybrid propulsion for commercial and light vehicles, and industrial applications. The company operates through Fuel Systems and Aftermarket segments. The Fuel Systems segment provides advanced fuel injection systems, including pumps, injectors, fuel rail assemblies, and engine control modules; fuel delivery modules; canisters; sensors; and electronic control modules. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "PHINIA Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for July 2026.

Image source: The Motley Fool. Thursday, July 30, 2026, at 8:30 a.m. ET Vice President and Treasurer - Gordon Muir Chief Executive Officer - Brady Ericson Chief Financial Officer - Chris Gropp Operator: Good morning, and welcome, everyone, to the PHINIA Second Quarter 2026 Earnings Call. Today's conference is being recorded. [Operator Instructions] At this time, I'd like to turn the conference over to Brady Ericson (sic) [ Gordon Muir ], Vice President and Treasurer. Please go ahead. Gordon Muir: Thank you, and good morning, everyone. We appreciate you joining us. Our conference call materials were issued this morning and are available on PHINIA's Investor Relations website, including a slide deck that we'll be referencing in our remarks. We're also broadcasting this call via webcast. Joining us today are Brady Ericson, CEO; and Chris Gropp, CFO. During this call, we will make forward-looking statements, including comments related to our 2026 guidance, which are based on management's current expectations and are subject to risks and uncertainties. Actual results may differ materially from these statements due to a variety of factors, including those described in our SEC filings. We caution listeners not to place undue reliance upon any such forward-looking statements. And with that, it's my pleasure to turn the call over to Brady. Brady Ericson: Thank you, Gordon, and thank you, everyone, for joining us this morning. I'll start with some highlights on the second quarter and some key developments in the quarter that support our strategy. Chris will then provide additional details on our second quarter results and discuss our 2026 financial outlook. We will then open up the call for questions. The second quarter developed largely as we expected with highlights including continued revenue growth from both Fuel Systems and Aftermarket, leading us to a refinement of our full year guidance. We were also excited to announce that the company has entered into a definitive agreement to acquire the stoba Group, a global technology partner specialized in high-precision components, systems and integrated solutions globally. As Slides 6 and 7 detail, stoba has operations in 4 countries, expect a run rate third-party revenue of approximately $80 million and accretive EBITDA of approximately $25 million. We expect the integration of the stoba Group to expand our exposure in off-highway, industrial and other customers and markets and drive synergistic profit expansion through supply chain ownership, integration of key capabilities and cost efficiencies. This will also add an additional aerospace and defense qualified location to our portfolio as well as greater exposure to these customers. Excitingly, these assets support the global semiconductor industry with high-performance equipment components, opening another avenue of growth and diversification. Closing of the deal is expected in the fourth quarter of 2026 and will be funded with available liquidity. Returning capital to shareholders is a key component of our capital allocation strategy. And with a healthy balance sheet, we continue paying dividends and repurchasing shares. We are confident of our operational and financial performance that allows us ongoing run rate capital returns to our shareholders. While the environment continues to evolve rapidly, our teams are managing our business well and delivered results that strengthen our long-term foundation. Our diversification across regions, customers, end markets and products helped offset variability in any single region or segment. And finally, we continue to adapt to ongoing changes in government policy governing tariffs, and as such, with expected net refunds during the quarter, with some cash settlements already received. Chris will discuss further details in her commentary. Turning to Slide 8. PHINIA continued to demonstrate resilience in a mixed macroeconomic environment. Demand conditions across key end markets remain steady, supported by durable replacement cycle fundamentals and ongoing positive results in the commercial vehicle industry. We continue to navigate ongoing geopolitical and trade-related uncertainty, tariff changes, as previously noted, shipping challenges and regional production variability. Through strong operational execution and disciplined cost management, we've managed these challenges effectively. We continued our streak of year-over-year growth in both Aftermarket and Fuel Systems segments. Total net sales in the quarter were $940 million, up 5.6% from the same period of the prior year. Excluding FX impacts, the impact of tariff recoveries and the contribution of SEM, revenue was up 2%. We reported adjusted EBITDA of $130 million for the quarter, up $4 million, representing a margin of 13.8%. Total segment adjusted operating income was $125 million or 13.3% margin. The Fuel Systems segment delivered a strong quarter with sales of $584 million, up 5% and adjusted operating margin of 11%. The Aftermarket segment had sales of $356 million, up 6.6% with adjusted operating margin of 17.1%. Adjusted earnings per diluted share, excluding nonoperating items, was $1.53 for the quarter compared with $1.27 in the same period of the prior year, a 20.5% increase year-over-year. From a balance sheet perspective, PHINIA continues to demonstrate financial stability and consistency. We exited the quarter with a cash position of $370 million and a total liquidity of $820 million. Our net leverage ratio was 1.3x, which is under our target of 1.5. We returned $53 million to shareholders in the form of share repurchases and dividends. Our balance sheet continues to provide the financial flexibility to support growth initiatives while returning capital to shareholders. In summary, while the external environment continues to evolve, we remain focused on the current and future of the business. The second quarter performance underscores the durability and resilience of our business amid a rapidly changing global environment by serving a broad mix of regions, customers, end markets and products. Moving to Slide 9. I am pleased with the success we are having with respect to gaining new business. The second quarter was another good quarter for us, reflecting continued progress across multiple fronts. Importantly, we're continuing to grow with our existing customers, adding new ones and gaining real traction in new areas of our portfolio. This quarter included notable wins across OE and aftermarket channels, reinforcing customer trust, technology differentiation and PHINIA's ability to deliver premium solutions to our customers. Launch progress on important programs in our portfolio, including aerospace, off-highway, heavy-duty truck, continue at an advanced pace, which will support our progress through the end of the decade and beyond. Key Fuel Systems wins in the quarter include a new business for a heated tip MPFI system, supporting light passenger vehicle engine application, further expanding PHINIA's alternative fuel portfolio; a 24-volt starter program supporting a Class 8 commercial vehicle platform, reinforcing PHINIA's long-standing position in the heavy-duty on-highway market; a complete common rail system program for agricultural applications, highlighting the strength of PHINIA's integrated fuel system portfolio and reinforcing our position in the growing off-highway sector. Turning to Slide 10. Our Aftermarket business continues to be a steady and reliable contributor to our results. Demand remains consistent, driven by an aging fleet and a growing vehicle park. As vehicles stay on the road longer, customers around the world rely on our quality parts and service more than ever. Our strong and recognizable brands, broad and consistently expanding product offerings and focus on customer service are helping us build deeper relationships and win new opportunities. Recent wins were across diverse geographies, further strengthening our position in the independent aftermarket. A few notable changes during the quarter include open vehicle electronic distribution with a leading pan-European distributor, significantly expanding market access across the EMEA region; expanded the global aftermarket footprint through new customer acquisitions, branch expansion and increased distribution penetration across North Africa, Eastern Europe, North and South America, China, Southeast Asia and Oceania. We introduced more than 2,650 new SKUs globally during the first half of 2026, while adding more than 150,000 cross-references to regional catalogs, expanding vehicle coverage and enhancing customer access to PHINIA products. These wins show consistent progress towards seamlessly diversifying into higher-growth end markets by leveraging our existing human and manufacturing capital. Additionally, we had several significant product launches this quarter, including a 500bar GDi system, showcasing our full system capabilities and continued leadership in advanced gasoline technologies; a fuel delivery module in India, broadening our CV portfolio and supporting growth in a key strategic market; and a next-generation GDi pump reinforcing our position in passenger and light commercial vehicle applications. Moving next to capital allocation on Slide 12. Our approach remains unchanged. We are staying disciplined and balanced and are continuing to invest in our business to support long-term growth, both organically and through strategic opportunities that strengthen our competitive position and expand our long-term opportunities. At the same time, we are committed to maintaining a healthy balance sheet and returning cash to shareholders through dividends and share buybacks, which do not slow down despite striking the deal for the stoba acquisition. This approach reflects our strong financial position, our confidence in the path ahead and our focus on long-term value creation. During the quarter, we returned $53 million to shareholders in the form of dividends and repurchases. $216 million remains under our current share repurchase authorization. Since the spinoff in July 2023 through the second quarter of this year, we repurchased $534 million worth of shares, representing approximately 24% of our original share count and paid $131 million in dividends. In total, we have returned $665 million to shareholders through share buybacks and dividends since July 2023. We've achieved all of this while keeping net leverage below our target, preserving strong liquidity and continuing to fund the growth of our business. Finally, I want to thank and congratulate all of our employees as we just surpassed our third anniversary as an independent publicly traded company. It's been a great journey so far and look forward to many more years to come. I'll now turn the call over to Chris to discuss our financial results in more detail and discuss our 2026 outlook. Chris Gropp: Thanks, Brady, and thanks to all of you for joining us this morning. As a reminder, reconciliations of all non-GAAP financial measures that I will discuss can be found in today's press release and in the presentation, both of which are on our website. In the second quarter, we delivered results in line with our expectations and that reflect both the strength of our diversified portfolio and the benefits of our operational discipline. Diving into the details, which you can find on Slides 13 and 14 of the presentation, I will bridge our revenue and adjusted EBITDA for the second quarter. Specifically, during the quarter, we generated $940 million in net sales, an increase of 5.6% versus a year ago. Compared to Q2 2025, our top line rose 2.4%, unfavorable foreign exchange of $21 million as the Chinese renminbi, euro and Brazilian real strengthened against the U.S. dollar. We saw a positive contribution from volume and mix of $18 million or 2% on positive customer pricing and higher sales in the Americas aftermarket. Revenue in the quarter was reduced from net tariff pass-through of $7 million, affected mainly by anticipated tariff refunds from the government expected to be passed through to customers who had previously reimbursed us for portions of the impact. Finally, SEM contributed sales of $18 million in the quarter. Excluding the FX impact, SEM contribution and tariff pass-throughs, sales were up 2% in the quarter. Moving next to the bridge on Slide 14. Adjusted EBITDA was $130 million in the quarter with a margin of 13.8%, representing a year-over-year increase of $4 million and a 40 basis point decrease in margin. Net tariff expense and anticipated refunds were an $11 million contribution to earnings in the quarter. Contribution from SEM was $3 million or a 16.6% margin in the quarter. Product mix, partially offset by supplier savings and cost control measures, was a $1 million headwind. Other costs, including corporate costs, were up approximately $9 million, primarily due to adjustments for short- and long-term incentive compensation. All changes are related to previously published incentive compensation schemes for PHINIA associates, which reward improvements in economic value and the cash generation of the business. We continue to effectively execute our disciplined capital allocation strategy, successfully balancing significant cash return to shareholders with the potential for strategic accretive M&A. Cash and cash equivalents at quarter end were $370 million, while available capacity under our credit facility was approximately $450 million for a resulting liquidity of $820 million. Cash flow from operations was $91 million, an increase of $34 million over second quarter 2025. Adjusted free cash flow was $74 million, with capital expenditures of 2.3% coming in below our target of 4% and efficient uses of working capital in the quarter, including approximately $1 million in cash tariff refunds received. Share repurchases and dividends represented our primary use of capital with value back to our shareholders of $42 million and $11 million, respectively, in the quarter for year-to-date totals of $98 million and $22 million, respectively. As Brady noted, we announced the purchase of stoba Group in late June with an expected close date of Q4 2026, dependent upon normal regulatory approvals and customary closing conditions. With a purchase price of approximately 6x EBITDA, we expect the inclusion of the business to be accretive on a run rate EBITDA basis, adding approximately 40 basis points on an annual basis. While full stoba Group sales were approximately $200 million, this balance includes sales to PHINIA operations, which upon consolidation are eliminated as intercompany sales. On a third-party basis, this asset will add full year sales of approximately $80 million and $25 million or 31% in adjusted EBITDA. We are excited to welcome the group into the PHINIA family, strengthening capabilities, expertise and future growth opportunities in multiple markets and product lines. We continue to generate strong free cash flow, supporting our near- and long-term capital allocation priorities. Our broadening portfolio of products, solutions and services, coupled with our healthy balance sheet, will enable us to continue to deploy capital with discipline, focused on delivering long-term sustainable profitable growth, creating value for our shareholders. Moving next to Slide 15 to comment on our 2026 outlook. As we move through the year, we're refining the full year guidance we issued earlier this year. Specifically, we're tightening the range of revenue while keeping the midpoint of our revenue outlook range. At $3.57 billion to $3.67 billion, we would expect an increase in net sales in the mid-single-digit range, inclusive of FX. Excluding expected FX, our growth is projected to be in the low single-digit area. We are now guiding adjusted EBITDA to be $485 million to $515 million, with an EBITDA margin of 13.5% to 14.1% as sales impacts from FX and net tariff recoveries as well as product mix have had a slightly dilutive impact on margins. We believe the business is well positioned to continue generating meaningful free cash flow, and we've updated our 2026 outlook for adjusted free cash flow to $210 million to $250 million. We expect the adjusted tax rate to be in the 30% to 33% range as meaningful progress has been made in addressing legacy tax structure headwinds. Overall, we expect to continue to deliver strong results in 2026 as we drive operational efficiencies and search for new areas of growth for both segments. As a reminder, our outlook does not account for potential impacts from changes related to the announced stoba acquisition in addition to recent or future government policy changes or other risks described in our filings with the SEC that could influence our operations or technical centers. This includes measures such as additional tariffs, tax reforms or any other policies that might either increase or decrease our revenue assumptions and/or alter our cost structure. With that said, we believe PHINIA is well positioned to navigate global market conditions and changes, and we are confident in our operations and our ability to generate sufficient cash for our needs while also continuing to invest in the future. As we look forward to the rest of the year, we look forward to managing the business as demand, risks and opportunities develop while providing solid returns to our shareholders. We want to thank you all for joining us on this call today, and we are ready to open up the call to questions. Operator, please open the lines. Operator: [Operator Instructions] We'll go to our first question from Christian Zyla at KeyBanc Capital Markets. Christian Zyla: First question for me is just on the guide lower amid what seems like a positive backdrop. So LPV might be better than expected on higher volumes and/or mix. Commercial vehicle orders in the last 3 months have been positive. The industrial backdrop on IP and PMI is positive. So just can you kind of frame out like how much of the guide down, kind of, as we think about 2026 and then even into '27, like how much is that positive backdrop weighing like the guide down? I'm just trying to kind of square those two. Brady Ericson: Yes. I mean from a revenue standpoint, we kept it flat. And so really no change. We're always expecting the back half of the year to be a little bit stronger than the first half. CV, as you mentioned, is looking a little more positive. I think light vehicle globally a little bit weaker, seeing some weakness in China light vehicle market. I think you see that local market down in the mid-teens. So seeing some challenges there. But all in all, we kept our overall revenue flat or guide flat. Chris Gropp: Let me add one area, Christian. The tariff refunds that we're getting, there's a big chunk of those, in fact, about half of what we booked will go back to customers. That's a reduction in sales. So that's about a $7 million hit on the revenue. It's not extremely material, but that is also an effect that we did not have at the beginning of the year. Christian Zyla: Got it. And then for my follow-up, if I can just ask about stoba. So is the right way to think about the incorporation of the business, like $80 million in sales and, I don't know, $10 million in EBITDA? Or is there something special to think about in terms of the EBITDA dollars that you get from the deal? Brady Ericson: No, you have the right -- $80 million is the revenue, the $25 million is the EBITDA. And it's just the -- because again, we've got $120 million of revenue that was from stoba to PHINIA. And when it gets eliminated as intercompany, but we still have the profit from it. And so the right way to look at it is $80 million of additional revenue, $25 million of EBITDA. And that's why Chris kind of highlighted that given that, it's actually going to be EBITDA margin accretive by close to 40 basis points. Operator: We'll move next to Jake Scholl at BNP Paribas. Thomas Scholl: Can you provide a little bit more detail on what drove your decision to acquire stoba? And then how should we think about potential synergy-driven upside to that $25 million in EBITDA? Brady Ericson: Yes. I mean, stoba has some really unique operational capabilities and manufacturing. They were obviously a key supplier to us. We've known them for a long time, and this is also part of our kind of just making sure we have a stronger supply base, and we're protecting our customers. They were obviously a small organization, only $200 million of sales roughly. And we thought this kind of made sense to solidify our own manufacturing capabilities as well as opening up additional customers for us. And so one of their sites is aerospace and defense certified. So that's going to open up some additional customers there. They have customers that we currently don't support. So I think that's going to be an interesting opportunity there. And then finally, I think as far as synergy, the $80 million and the $25 million is what we expect them to be relatively quickly. As with the SEM, that also includes some dissynergy to bring them kind of up to speed to our capabilities and systems and processes and controls. And so that kind of considers some of the synergy as well as the dissynergy. I think longer term, we see opportunities for higher growth. And again, from our standpoint, it solidifies our supply base and our manufacturing supports our customers, expands their off-highway and industrial and other kind of exposure end markets at a fair valuation. And we think the longer term, there may be some synergies that we'll be able to get from them as well. So we thought it was a nice acquisition and a nice tuck-in for us. Thomas Scholl: Then could you guys just help us understand the bridge to $10 million in higher free cash this year? And then as we look at stoba's customized machinery business, it looks like they provide or they could provide a lot of the precision and laser machine equipment that you guys use. So does stoba make up a material portion of the CapEx? And is there potentially an outsized free cash impact from the deal? Brady Ericson: I think they can help us on the equipment side. They do some of their own machine building, and that's what some of their capabilities are, and that's some of the equipment that we need as well. So there's some additional synergies there. I think you see from the cash side, I think that it continues to be a real positive story. I think you see our working capital as a percent of our revenues kind of continue to be improved. The team is doing a good job managing that working capital. Cash tax rate continues to come down a little bit. And again, that's CapEx coming in a little bit lighter that's helping our cash flow as well. So there's a lot of little different things that are going into it. But I think in general, from our -- as Chris mentioned, from the employee costs and the short-term incentives for the employees, economic value is around being more efficient. And that's driving the teams to really drive operating investment down, questioning some of the CapEx and the investments, ensuring we keep our working capital down. And with the increased profitability of the business, they're doing a nice job there. And with that improved working capital and being more efficient, that drives additional cash flow as well. And so that's why we've increased that. If you see our first half of the year so far, we're at over $100 million. So I think we're a large chunk ahead of where we were -- close to $80 million, I think, above where we were last -- through the first half of the year. So the team is doing a really nice job there. I do think we have some timing benefits that got pulled into Q2 that's giving us some benefits. But I think the team is really focused on generating strong cash, and that's allowed us to continue to return money to shareholders and support an acquisition at the same time. Operator: [Operator Instructions] We'll go next to Joe Spak at UBS. Joseph Spak: Maybe just a couple of clarification points. So first on stoba. Is the right way to think about this like -- because I know you're saying it's margin-accretive, but when it was stand-alone, it was like 12.5% margin. Is the right way to think about this, it's like $10 million of EBIT to external and then like $15 million of vertical integration savings? Brady Ericson: Yes, that's probably a fair way to say it. Joseph Spak: Okay. So that's how you get to being sort of margin-accretive because you're basically you're saying, right, the sales don't count, but then you get some vertical integration savings? Chris Gropp: Yes. Joseph Spak: Okay. Okay. And then the tariff recovery that helped by $11 million in the quarter, was there always an expectation in your outlook of a tariff recovery? And I guess, similarly, like the employee compensation you're mentioning, was that also what was previously baked into the outlook? And then maybe is there any more of either left in the back half? Chris Gropp: All right. I'll start off, maybe you're... Brady Ericson: I don't think -- Chris Gropp: Or do you want to go or... Brady Ericson: All right, Chris. Chris Gropp: I'll get started and then you can fill in, if I can now remember the questions. Let me go back. The tariffs that we're recovering, these are the IEEPA. The majority of it this quarter was the IEEPA. And no, that was not in guide because it was quite unclear, obviously, until the Supreme Court decision. So it wasn't until some people started the GM4 and started booking some at the end of Q1. For us, it wasn't clear until we started doing the filings with customs and what was going to be coming back in, and then we actually started getting cash in. Once all of the -- what they call K1, 2 and 3 were put in and accepted then working -- we felt confident it's estimable, it's probable. We know we're going to get those in. And we also know how much we will then have to refund to our customers who funded those upfront. So no, that was not anticipated in the original guide. And on the -- then the bonuses, yes, we did have a lot of that baked in, but there's one item, there's the stock comp, and it's not massive, but about $2 million in the first half of the year on our stock comp, which -- because our stock price is higher, we needed to revalue that and bump it up. The rest of it is on bonuses. We are bumping those up. We had target bonuses in our original guide and our expectations. However, because the teams have really been working on working capital and cash flow, which are big components of our overall EV, economic value models, and our -- their merit to know what they have to achieve, that we had to bump that up. So it's not going to be over -- we will be booking additional in the back half of the year, but not materially more than we have in this half of the year unless we have even higher increases. Joseph Spak: Okay. So maybe just to summarize then, if we think about your full year guidance, the good guy relative to prior is the tariff, which wasn't in there, but that's at least partially offset or I guess, maybe more than offset by those higher compensation costs. Those are the two changes? Or are we missing any other factors? Chris Gropp: Those are the material ones. So yes, going into the back half, we will not have additional IEEPA. However, in the back half, we do have additional global supply chain savings and other productivity improvements that will offset any additional bonuses. Joseph Spak: Okay. So maybe that answers my last question, which was, like, if we back out the tariff gain, the $11 million in the quarter, then it does seem like margins step up about 100 basis points half-over-half on flat sales, but it's driven by what you just mentioned, which is the productivity? Chris Gropp: Yes. Yes. Operator: We'll take our next question from Bobby Brooks at Northland Capital Markets. Robert Brooks: I thought something that was very meaningful from stoba acquisition is that it has an A&D qualified location. And so I was curious to hear more on that. Does it already have the right type of capital equipment installed there to fulfill your current programs that you're on? Where is the location? And how much slack capacity is available there? Brady Ericson: Yes. From their A&D location, yes, we're excited about that one, too, that gives us the second one that's actually in Germany. As we kind of highlighted, there's 7 manufacturing sites in the U.K., China, Czech Republic and Germany. The bulk of those are in Germany, close to their customers, which we think is good as well because I think with the increased investment in A&D in Europe, I think being in France and Germany is going to be one of the requirements. We think they have plenty of capacity. So all of it is already kind of installed. Obviously, they do a lot of detailed machining, as you see from one of the pictures there. It's a very advanced process. But we think we're going to be able to utilize some of their excess capacity as well to kind of help our global business as well. So we're not concerned about having significant additional capital to meet those needs, and we think they're in a really spot for us. Some of those customers, the [ Wilbers ], even the Dyson, the ZF, the Dysons, there's a lot of different customers out there that are going to be new for us that's going to allow us to open up additional opportunities with them. So we're kind of really excited about that opportunity as well. Do you have anything? Robert Brooks: Yes, that was very helpful. I guess just kind of double-clicking on that. Of the $80 million that were third-party sales for stoba, just curious to hear how much of that, like, the split of off-highway, industrial aerospace or other similar companies to yourself? Just curious to get a sense there. Brady Ericson: Yes. I mean we're not -- we don't have the exact details that we're going to share. But again, it's going to increase our percentage of off-highway, industrial and other as a percent of revenues. There is a decent chunk with some of our competitors and/or peers. And so there's a little bit of risk there, but not one that we're overly concerned with. We want to continue to support them, and we'll firewall off that to protect their IP. But we see it as a nice opportunity. And again, those customers I just highlighted are new for us in our group, and we think it's going to be exciting to continue to grow with them. But it should help us in our focus of expanding our commercial vehicle, off-highway, industrial and other as a percent of our revenues. Robert Brooks: Got it. And I apologize, this -- kind of already touched on this, but, obviously, the 23% gross margins you posted in the second quarter, those were a record for the company since going public. And I believe some of that -- there is some benefit baked in there from the tariff recoveries. And I know it's like $11 million was a benefit in the quarter. But just curious like how much of that helped drive those record gross margins. And it seems like volume was a benefit, but so just curious to hear if you could touch on any other factors that led to the strength there because I thought that was a meaningful number. Brady Ericson: Yes. I mean, you saw from both the Fuel Systems and the Aftermarket, operating income was really strong. I think the SG&A and some other items where all the employees was more of the headwind. From a gross margin, again, I think they're doing well. I guess, Chris, if you want to answer that one as far as the flow-through of the net tariff because it did affect our sales as well. Chris Gropp: Yes. And probably hit it. But on the tariffs, so the IEEPA portion of the tariffs was $7 million benefit, and then the rest would be just the other -- the normal tariff pass-through that we're getting -- benefit that we get as we've been doing for the last number of quarters. But then the other -- I mean material is SEM certainly contributed. They weren't in there last year, and they came in at just short of 17% AOI in the quarter. So that was another positive that you would have to add in that's a benefit and will be an ongoing benefit, obviously. Robert Brooks: Got it. And then just last one for me. Obviously, shareholder returns have been a key story for you guys and have been robust. But should folks expect buybacks might subside a bit with the pending stoba closing? Or just any color on your thoughts there? Brady Ericson: I mean, as I highlighted in the script as well, we don't see this as affecting our capital allocation strategy. I think we're still at 1.3 I think is what we ended the quarter at. The stoba acquisition is going to add additional EBITDA as well. So it's going to help us from an EBITDA perspective on a run rate basis. And so we still think that if we see a good opportunistic share to repurchase, we'll continue to do that. So there's nothing that's going to materially change how we've been acting. Operator: We'll go to a follow-up from Christian Zyla at KeyBanc Capital Markets. Christian Zyla: Just one question kind of generally. I guess, how long were you guys courting stoba? Like was this part of the pipeline or did this kind of recently come into your lap? And then just as we think about SEM and stoba, more of these like tuck-in companies, is your pipeline -- does your pipeline have more of these little tuck-ins? Or with the first two, should we kind of expect a little bit of a lull in future deals and M&A activity? Brady Ericson: No. I think we've got -- we've been talking with stoba for a while about this. Again, with any acquisition, I'd say most acquisitions will take probably close to a year from initial conversations to getting alignment on agreeing on a path forward and agreeing on a price and then going through a due diligence process. And so I'd say all acquisitions, there's nothing that's going to be falling into lap that's going to happen real quickly. As far as the pipeline is concerned, there's still a very robust pipeline. And again, I think we continue to pursue options. Our kind of M&A team is extremely busy, vetting a lot of different options. There's still a strong pipeline. It's always just ensuring that it meets our criteria as far as enhancing our commercial vehicle and off-highway business, industrial, other aftermarket type areas, and it's at a price that makes sense. And so from our standpoint, we still have a large pipeline of companies out there. Some of them, we continue to have discussions with. Other ones we have on the monitor list saying, hey, let's wait for that right time or when they're ready, we'll be ready. So it's still pretty active. I don't see any lull in any activity in our group. Operator: And with that, that concludes our Q&A session. I will now turn the conference back over to Brady for closing remarks. Brady Ericson: Great. Thanks, everyone, and thanks for the great questions. We feel we delivered a really strong start to the year, reflecting the benefits of our diversified portfolio, our disciplined execution and the strength of the markets we serve. I want to thank our teams around the world for their continued commitment and execution. We began the year with solid results, remain focused on delivering consistent growth, expanding profitability and building a stronger PHINIA for the long term. Thank you for joining us this morning, and have a nice day. Operator: And this concludes today's conference call. Thank you for your participation. You may now disconnect. Before you buy stock in Phinia, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Phinia wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $397,081!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,166,221!* Now, it’s worth noting Stock Advisor’s total average return is 889% — a market-crushing outperformance compared to 203% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of July 30, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool recommends Phinia. The Motley Fool has a disclosure policy. Phinia (PHIN) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Revenue growth of 5.6% was driven by sustained demand in Fuel Systems and Aftermarket segments, supported by an aging global vehicle fleet and durable replacement cycles. The acquisition of stoba Group is a strategic move to vertically integrate high-precision component manufacturing, securing the supply chain while expanding exposure to aerospace, defense, and semiconductor markets. Operational resilience was demonstrated through disciplined cost management and the ability to offset regional production variability, particularly weakness in the Chinese light vehicle market, with strength in commercial vehicles. Management attributed the 20.5% increase in adjusted EPS to strong segment performance and the successful integration of the SEM acquisition, which delivered a 16.6% margin. Strategic positioning in alternative fuel portfolios was reinforced by new business wins for heated tip MPFI systems and advanced 500bar GDi systems, catering to evolving engine applications. The company successfully navigated geopolitical and trade uncertainties, utilizing net tariff recoveries and operational efficiencies to maintain margins despite adjustments for short- and long-term incentive compensation based on business performance. Full-year 2026 revenue guidance was refined to a tighter range of $3.57 billion to $3.67 billion, assuming a stronger second half of the year driven by commercial vehicle demand. Adjusted EBITDA guidance of $485 million to $515 million accounts for slightly dilutive impacts from foreign exchange, net tariff recoveries, and product mix shifts. The stoba Group acquisition, expected to close in Q4 2026, is projected to be 40 basis points EBITDA margin accretive on a run-rate basis, adding approximately $80 million in third-party revenue. Free cash flow outlook was raised to $210 million to $250 million, reflecting improved working capital efficiency and lower-than-targeted capital expenditures of 2.3%. Management assumes a continued reduction in the adjusted tax rate to the 30% to 33% range as legacy tax structure headwinds are addressed. A $7 million reduction in revenue was recorded due to anticipated tariff refunds that must be passed through to customers who previously reimbursed the company. Corporate costs increased by $9 million primarily due to adjustments in short- and long-term incentive compensation linked to improved economic value and cash generation. The company received approximately $11 million in net tariff benefits during the quarter following favorable legal and regulatory developments regarding IEEPA filings. Management identified the global semiconductor industry as a new avenue for growth and diversification through the acquisition of the stoba Group. and potential future government policy changes regarding tariffs and tax reforms. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management kept the revenue midpoint flat because strength in commercial vehicles is being offset by mid-teens declines in the Chinese light vehicle market. The $7 million tariff refund pass-through to customers acts as a technical headwind to the top-line revenue figure that was not in the original guidance. The deal is structured to eliminate $120 million in intercompany sales while retaining the profit, resulting in $80 million of external revenue and $25 million of EBITDA. Synergies will be driven by vertical integration and utilizing stoba's internal machine-building capabilities to reduce PHINIA's future capital expenditure requirements. Higher employee compensation costs in the first half were driven by the company exceeding internal cash flow and working capital targets, as well as a higher stock price affecting equity awards. Management expects productivity improvements and global supply chain savings to offset these higher bonus accruals in the second half of the year. The acquisition of stoba will not slow down the pace of share repurchases or dividends, as net leverage remains below the 1.5x target. The M&A pipeline remains robust with a focus on 'tuck-in' acquisitions that enhance commercial vehicle, off-highway, and industrial segment exposure.

AUBURN HILLS, Mich., July 30, 2026--(BUSINESS WIRE)--PHINIA Inc. (NYSE: PHIN), a diversified, industrial supplier and global leader in the development of fuel systems, electrical systems, and aftermarket solutions, today reported results for the second quarter ended June 30, 2026. Second Quarter Highlights: On June 30, 2026, PHINIA entered into a definitive agreement to acquire the stoba Group, a global technology partner specialized in high-precision components, systems, and customized manufacturing solutions. The proposed transaction is expected to close in the fourth quarter of 2026, subject to customary regulatory approvals and closing conditions. Net sales of $940 million, an increase of 5.6% compared with Q2 2025. Net earnings of $40 million and net margin of 4.3%, representing a year-over-year decrease of $6 million and 90 basis points (bps), respectively. Adjusted EBITDA of $130 million, an increase of $4 million year-over-year driven primarily by net tariff refunds and the acquisition of SEM, partially offset by higher employee costs primarily attributable to variable and stock-based compensation, associated with the Company’s continued strong performance. Adjusted EBITDA margin was 13.8%, down 40 bps year-over-year, primarily due to increased employee-related costs and unfavorable product mix, which more than offset the margin benefit of tariff recoveries. Net earnings per diluted share of $1.05. Returned $53 million to shareholders through $42 million of share repurchases and $11 million in dividends. Key Wins in Strategic Growth Markets: New and incumbent business wins remained strong. Notable Q2 wins include: A heated-tip multi-point fuel injection system program supporting a passenger vehicle engine application, further expanding our alternative fuel portfolio. A 24V starter program supporting a Class 8 commercial vehicle platform, reinforcing our long-standing position in the heavy-duty on-highway market. A complete common rail system program, including the rail, pump, injectors, and electronic control unit, for agricultural applications, strengthening our presence in the off-highway market. Opened vehicle electronics distribution with a leading pan-European distributor, significantly expanding our market access across the EMEA region. Expansion of our global aftermarket footprint through new customer acquisitions, branch expansion and increased distribution penetration across North Africa, Eastern Europe, North and South America, China, Southeast Asia and Oceania, increasing customer reach and product availability in strategic growth markets. "We delivered another quarter of strong performance, with sales growth across our business and higher adjusted EBITDA year-over-year. These results reflect healthy demand in the Americas, the successful integration of SEM, and the consistent execution of our strategic priorities. As we navigate a dynamic operating environment, we remain focused on driving profitable growth and delivering long-term value for our shareholders. The planned acquisition of stoba Group marks another important milestone in that journey, expanding our manufacturing capabilities and reinforcing the resilience, control, and flexibility of our supply chain," said Brady Ericson, President and Chief Executive Officer of PHINIA. Balance Sheet and Cash Flow: The Company ended the quarter with cash and cash equivalents of $370 million and $450 million of available capacity under its Revolving Credit Facility. Total debt at quarter end was $1,019 million. Net cash generated by operating activities was $91 million, representing a year-over-year increase of $34 million. Adjusted free cash flow was $74 million, an increase of $54 million compared to the second quarter of 2025, primarily due to strong execution of inventory optimization initiatives, working capital discipline, and lower capital expenditures. 2026 Full Year Guidance: The Company is refining its guidance and now expects 2026 net sales of $3.57 billion to $3.67 billion. This implies a year-over-year growth of 2% to 5% in 2026. The Company’s net earnings and adjusted EBITDA are projected to be $155 million to $180 million and $485 million to $515 million, respectively, with net earnings margin of 4.3% to 4.9% and adjusted EBITDA margin of 13.5% to 14.1%. The Company expects to generate $210 million to $250 million in adjusted free cash flow. Adjusted tax rate is expected to be in the range of 30% to 33%. The Company will host a conference call to review second quarter 2026 results and take questions from the investment community at 8:30 a.m. ET today. This call will be webcast at PHINIA Q2 2026 Earnings Call. Additional presentation materials will be available at Investors.phinia.com. About PHINIA PHINIA is a diversified, industrial supplier and global leader in the development of fuel systems, electrical systems, and aftermarket solutions, with a strong portfolio of trusted brands that includes DELPHI®, DELCO REMY®, and HARTRIDGETM. With over 100 years of manufacturing expertise and industry relationships, PHINIA has approximately 12,500 talented employees and over 40 locations in 20 countries and is headquartered in Auburn Hills, Michigan, USA. Our systems and solutions are designed to keep combustion engines operating at peak performance across a variety of applications: medium- and heavy-duty commercial vehicle (on-road vehicles used for commercial transport classified class 4-8, 14,001 pounds or heavier), light commercial vehicle (on-road vehicles used for commercial transport classified as class 1-3, 14,000 pounds or lighter), light passenger vehicle (on-road vehicles used primarily for carrying passengers), and off-highway, industrial, and other (including construction and agricultural machinery, vocational vehicles, marine, industrial applications, power generation, and aerospace and defense). PHINIA’s service solutions include vehicle repair and replacement parts, offering both new and remanufactured products through the original equipment manufacturer dealer network and the independent aftermarket channel. By delivering high-performance solutions today and investing in advanced technologies to unlock the potential of alternative fuels in contributing to lower carbon mobility, PHINIA is shaping a more efficient and sustainable future. © 2026 PHINIA Inc. All Rights Reserved. (DELCO REMY is a registered trademark of General Motors LLC, licensed to PHINIA Technologies Inc.) Forward-Looking Statements: This press release contains forward-looking statements within the meaning of U.S. federal securities laws. Forward-looking statements are statements other than historical fact that provide current expectations or forecasts of future events based on certain assumptions and are not guarantees of future performance. Forward-looking statements use words such as "anticipate," "believe," "continue," "could," "designed," "effect," "estimate," "evaluate," "expect," "forecast," "goal," "initiative," "intend," "likely," "may," "outlook," "plan," "potential," "predict," "project," "pursue," "seek," "should," "target," "when," "will," "would," and other words of similar meaning. Forward-looking statements are subject to risks, uncertainties, and factors relating to our business and operations, all of which are difficult to predict and which could cause our actual results to differ materially from the expectations expressed in or implied by such forward-looking statements. Risks, uncertainties, and factors that could cause actual results to differ materially from those implied by these forward-looking statements include, but are not limited to: adverse changes in general business and economic conditions, including recessions, adverse market conditions or downturns and other factors, including geopolitical tensions and related trade restrictions, impacting the global transportation and industrial equipment industries; our inability to deliver new products, services and technologies in response to changing consumer preferences and evolving exhaust emissions regulations, or acceleration of the market for electric vehicles or deceleration of the market for alternative fuel technologies, including for use in internal combustion engines; competitive industry conditions; failure to identify, consummate, effectively integrate or realize the expected benefits from acquisitions, partnerships or other strategic investments; failure of or disruption in our technology infrastructure, including a disruption related to cybersecurity; pricing pressures from customers; elevated inflation rates and volatility in the costs of commodities used in the production of our products; difficulties launching new machine, engine or vehicle programs; changes in U.S. and foreign administrative policy, including increases in tariffs, changes to existing trade agreements and import or export licensing requirements and exchange controls, and any resulting changes in international trade relations; our inability to identify, attract, retain and develop a qualified global workforce; our inability to protect our intellectual property; failure to achieve the anticipated savings and benefits from restructuring and other actions, including those intended to improve future profitability and competitiveness, optimize our product portfolio and operations and execute our strategy; extraordinary events, including natural disasters or extreme weather events, political disruptions, terrorist attacks, pandemics or other public health crises, and acts of war; risks related to our international operations; economic, geopolitical, social and market conditions impacting our business in China; supply chain disruptions, including due to U.S. and foreign government action; our reliance on a limited number of OEM customers; work stoppages, production shutdowns and similar events or conditions; liabilities related to product warranties, litigation and other claims; current and future environmental, health and safety, human rights and other laws and regulations related to corporate sustainability; tax audits or similar processes, and changes in tax laws or tax rates taken by taxing authorities; governmental investigations and related proceedings; the impacts of climate change, regulations related to climate change, various stakeholders’ emphasis on reducing the impacts of climate change and other related matters; compliance with and changes in other laws and regulations impacting our operations; impairment charges on goodwill, indefinite-lived intangible assets and long-lived assets; changes in interest rates and asset returns that increase our pension funding obligations; restrictive covenants and other requirements impacting our financial and operating flexibility pursuant to the agreements governing our indebtedness; risks relating to the Spin-Off, including a determination that the Spin-Off does not qualify as tax-free for U.S. federal income tax purposes, our or our Former Parent’s failure to perform under, or additional disputes that may arise between the parties relating to, various transaction agreements executed in connection with the Spin-Off and any amendments and restatements thereto, and the availability of, and our ability to use, various credits and offsets detailed in such agreements or the settlement agreement between the Company and our Former Parent; and other risks and uncertainties described in Item 1A, "Risk Factors" and in our other reports filed from time to time with the Securities and Exchange Commission (the SEC). We caution readers not to place undue reliance upon any such forward-looking statements, which speak only as of the date they are made. We undertake no obligation to publicly update forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. Use of Non-GAAP Financial Measures This press release contains information about PHINIA’s financial results that is not presented in accordance with accounting principles generally accepted in the United States (GAAP). Such non-GAAP financial measures are reconciled to their most directly comparable GAAP financial measures below. The reconciliations include all information reasonably available to the Company at the date of this press release and the adjustments that management can reasonably predict. Management believes that these non-GAAP financial measures are useful to management, investors, and banking institutions in their analysis of the Company's business and operating performance. Management also uses this information for operational planning and decision-making purposes. Non-GAAP financial measures are not and should not be considered a substitute for any GAAP measure. Additionally, because not all companies use identical calculations, the non-GAAP financial measures as presented by PHINIA may not be comparable to similarly titled measures reported by other companies. A reconciliation of each of projected Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted Free Cash Flow, which are forward-looking non-GAAP financial measures, to the most directly comparable GAAP financial measure, is not provided because the Company is unable to provide such reconciliation without unreasonable effort. The inability to provide each reconciliation is due to the unpredictability of the amounts and timing of events affecting the items we exclude from the non-GAAP measure. Adjusted EBITDA and Adjusted EBITDA Margin The Company defines adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) as net earnings less interest, taxes, depreciation and amortization, adjusted to exclude the impact of restructuring expense, separation-related costs, merger and acquisition costs, other postretirement income and expense, equity in affiliates' earnings, net of tax, impairment charges, other net expenses, and other gains and losses not reflective of our ongoing operations. Adjusted EBITDA margin is defined as adjusted EBITDA divided by net sales. Management utilizes adjusted EBITDA and adjusted EBITDA margin in its financial decision-making process and to evaluate performance of the Company's consolidated results. Management also believes adjusted EBITDA and adjusted EBITDA margin are useful to investors in assessing the Company’s ongoing consolidated financial performance, as they provide improved comparability between periods through the exclusion of certain items that management believes are not indicative of the Company’s core operating performance. Adjusted Net Earnings and Adjusted Net Earnings Per Diluted Share The Company defines adjusted net earnings and adjusted net earnings per diluted share as net earnings and net earnings per share, each adjusted to exclude: (i) the tax-effected impact of restructuring expense, separation-related costs, merger and acquisition costs, impairment charges and other gains, losses and tax effects and adjustments not reflective of the Company’s ongoing operations; and (ii) acquisition-related intangibles amortization expense because it pertains to non-cash expenses that the Company does not use to evaluate core operating performance. Management believes that adjusted net earnings and adjusted net earnings per diluted share are useful to investors in assessing the Company’s ongoing financial performance, as they provide improved comparability between periods through the exclusion of certain items that management believes are not indicative of the Company’s core operating performance. Adjusted Free Cash Flow The Company defines adjusted free cash flow as net cash provided by operating activities after adding back adjustments related to the ongoing effects of separation-related transactions, less capital expenditures, including tooling outlays. Management believes that adjusted free cash flow is useful to investors in assessing the Company's ability to service and repay its debt and return capital to shareholders. Further, management uses this non-GAAP measure for planning and forecasting purposes. View source version on businesswire.com: https://www.businesswire.com/news/home/20260730044959/en/ Contacts IR contact:Gordon MuirVice President & [email protected] +1 574-210-5713 Media contact:Kevin PriceGlobal Brand & Communications [email protected] +44 (0) 7795 463871

Phinia (PHIN) came out with quarterly earnings of $1.53 per share, missing the Zacks Consensus Estimate of $1.58 per share. This compares to earnings of $1.27 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of -3.17%. A quarter ago, it was expected that this maker of gas and diesel fuel systems would post earnings of $0.92 per share when it actually produced earnings of $1.29, delivering a surprise of +40.22%. Over the last four quarters, the company has surpassed consensus EPS estimates two times. Phinia, which belongs to the Zacks Automotive - Original Equipment industry, posted revenues of $940 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 1.52%. This compares to year-ago revenues of $890 million. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Phinia shares have added about 31% since the beginning of the year versus the S&P 500's gain of 6.9%. While Phinia has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Phinia was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $1.78 on $952.85 million in revenues for the coming quarter and $6.24 on $3.69 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Automotive - Original Equipment is currently in the bottom 37% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Westport Innovations (WPRT), another stock in the same industry, has yet to report results for the quarter ended June 2026. The results are expected to be released on August 11. This maker of natural-gas engine technology is expected to post quarterly loss of $0.45 per share in its upcoming report, which represents a year-over-year change of -55.2%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Westport Innovations' revenues are expected to be $2.39 million, down 97.3% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report PHINIA Inc. (PHIN) : Free Stock Analysis Report Westport Fuel Systems Inc. (WPRT) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research