Core Viewpoint - Garrett Motion (GTX) has shown strong year-to-date performance compared to its sector, indicating a positive outlook for the stock [1][4]. Company Performance - Garrett Motion has returned approximately 21.7% since the beginning of the calendar year, significantly outperforming the Auto-Tires-Trucks sector, which has returned an average of -14% [4]. - The Zacks Consensus Estimate for Garrett Motion's full-year earnings has increased by 4% over the past quarter, reflecting improved analyst sentiment [4]. - Garrett Motion currently holds a Zacks Rank of 2 (Buy), suggesting it is positioned to outperform the broader market in the near term [3]. Industry Context - Garrett Motion is part of the Automotive - Original Equipment industry, which consists of 50 companies and currently ranks 90 in the Zacks Industry Rank [6]. - Stocks within the Automotive - Original Equipment industry have gained about 8.4% year-to-date, indicating that Garrett Motion is performing better than its industry peers [6]. - Strattec Security (STRT), another stock in the Auto-Tires-Trucks sector, has returned 63.2% since the start of the year and has a Zacks Rank of 1 (Strong Buy) [5].

Group 1 - The core viewpoint of the articles highlights the resurgence of headquarters projects in Guanggu, attracting significant foreign investment from global leading companies and Fortune 500 firms [1][2][3] - In 2025, the Wuhan Investment Promotion Conference resulted in the signing of 10 major projects in Guanggu, with a total investment amounting to 16.74 billion yuan [1] - Guanggu has signed over 60 projects worth more than 100 million yuan this year, indicating a consistent trend of investment activity [1] Group 2 - The "second headquarters" phenomenon in Guanggu began in 2017, with over 80 leading internet companies and numerous major enterprises establishing their second headquarters in the region by 2020 [2] - The focus of Guanggu's investment strategy is not merely on scale but on aligning with regional strategies and supporting industrial upgrades, thereby enhancing the local industrial ecosystem [2] - Guanggu has attracted over 1,300 foreign enterprises, including nearly 100 Fortune 500 companies, with more than 120 foreign enterprises registered last year, accounting for nearly 30% of new foreign investment enterprises in the city [3] Group 3 - The efficient business environment in Guanggu has been a key factor in attracting foreign investment, with companies like Amber Group citing quick establishment processes as a significant advantage [6] - Guanggu has optimized its foreign investment policies, introducing new incentives for development, research, and green initiatives, which have led to over a hundred foreign enterprises benefiting from these policies [7] - Recent initiatives include the establishment of overseas offices by local companies and the signing of agreements with international firms, enhancing Guanggu's global connectivity [7][8]

Core Insights - Garrett Motion Inc. has been added to the Russell 2000® Index, effective June 27, 2025, reflecting the company's growth and market position in automotive technology [1][2] - The addition to the index signifies Garrett's advancements in turbo technologies and its commitment to zero-emission mobility solutions [2] - Membership in the Russell 2000® Index is based on inclusion in the broader Russell 3000® Index, which is widely utilized by investment managers and institutional investors [2] Company Overview - Garrett Motion has a 70-year history in the automotive sector, focusing on innovation in turbocharging and differentiated technology solutions [5][6] - The company operates five R&D centers and 13 manufacturing facilities, employing over 9,000 people across more than 20 countries [6] - Garrett is actively developing technologies for Zero Emission Vehicles, including fuel cell compressors and electric propulsion systems [5][6]

Core Insights - Garrett Motion Inc. inaugurated its new Wuhan Innovation Center, enhancing its zero-emission R&D capabilities in China and globally [2][3] - The center is part of Garrett's strategy to strengthen its position as a leader in differentiated automotive technologies, particularly in electrification and decarbonization [3][7] Company Developments - The Wuhan Innovation Center is Garrett's second innovation hub in China, complementing the Shanghai R&D Center to create a "dual innovation engine" [2][5] - The center focuses on high-speed E-Powertrain systems for zero-emission applications, supporting both automotive and industrial decarbonization efforts [5][9] Technological Advancements - Garrett has a history of innovation in mobility technologies, including variable geometry turbines and hydrogen fuel cell compressors, with a strong emphasis on zero-emission solutions [4][6] - The E-Powertrain system integrates an electric motor, inverter, and gearbox, reducing system size and weight by up to 40% and cutting the use of critical materials by approximately 30% [8] Strategic Importance - The Wuhan Innovation Center embodies Garrett's "East for East" strategy, integrating R&D and manufacturing capabilities to accelerate the commercialization of zero-emission technologies [10] - The center aims to attract cross-disciplinary talent and foster partnerships with academic institutions and industry players to drive innovation [10]

Core Viewpoint - Garrett Motion announced a significant secondary offering of 17 million shares, leading to a 10% drop in its stock value as investors reacted negatively to the increased share supply [1][4]. Company Overview - Garrett Motion is the former auto division of Honeywell International, specializing in turbochargers for internal combustion engine vehicles and components for hybrid and battery electric vehicles [3]. - The company underwent bankruptcy after separating from Honeywell but has since returned to public markets with substantial ownership from private equity firms that aided in its restructuring [3]. Shareholder Dynamics - The secondary offering consists of shares owned by affiliates of Oaktree Capital Management, Centerbridge Partners, and Cyrus Capital Partners, with Garrett not receiving any proceeds from this offering [4]. - Private equity investors typically do not hold long-term stakes, indicating their intention to gradually cash out to return capital to their investors [5]. Financial Performance - Despite the ownership overhang from private equity sales, Garrett has successfully transformed into a free cash flow-generating entity, with the capacity to repurchase shares and currently offering a dividend yield of 2.3% [6]. Investment Perspective - For investors seeking solid cash generation opportunities, Garrett is considered an attractive option despite the short-term volatility associated with the secondary offering [7].

Company Overview - Garrett Motion Inc. is a leading differentiated automotive technology provider with a 70-year history of innovation in the automotive sector and beyond, including off-highway equipment, marine, and power generators [8] - The company specializes in turbocharging technology, which has led to significant reductions in engine size, fuel consumption, and CO2 emissions [8] - Garrett is actively developing technology solutions for Zero Emission Vehicles, including fuel cell compressors for hydrogen fuel cell vehicles and electric propulsion systems for battery electric vehicles [8] - The company operates five R&D centers and 13 manufacturing facilities, employing over 9,000 people in more than 20 countries [8] Recent Developments - Garrett announced a proposed secondary public offering of 17,000,000 shares of common stock held by certain entities managed by affiliates of Oaktree Capital Management, Centerbridge Partners, and Cyrus Capital Partners [1] - The underwriters have a 30-day option to purchase an additional 2,550,000 shares from the Selling Stockholders [1] - The company has authorized the repurchase of approximately 2 million shares of common stock as part of the secondary public offering, with a maximum aggregate repurchase amount of $25 million [2] - This repurchase is part of Garrett's existing $250 million share repurchase program [2] Underwriters and Regulatory Filings - Goldman Sachs & Co. LLC and J.P. Morgan Securities LLC are acting as lead bookrunners for the proposed offering, with several other firms serving as joint bookrunning managers [3] - A shelf registration statement and a preliminary prospectus supplement relating to the offering have been filed with the Securities and Exchange Commission [4]

Financial Data and Key Metrics Changes - Net sales for Q1 2025 were $878 million, slightly down year over year, but outperforming the industry in light vehicle turbo sales, with gasoline applications growing by 6% [7][14] - Adjusted EBIT was $131 million, with an adjusted EBIT margin of 14.9%, up 170 basis points compared to Q1 2024 [8][14] - Adjusted free cash flow was $36 million, in line with expectations for the quarter [8][18] Business Line Data and Key Metrics Changes - Net sales decreased by $37 million year over year, down 4% on a reported basis and 2% on a constant currency basis, with strong growth in gasoline applications offset by diesel softness [16] - Commercial vehicle and aftermarket applications saw lower demand, contributing to the overall sales decline [16] Market Data and Key Metrics Changes - The company has a well-balanced sales split across geographies, with only 20% of sales in North America [9] - Foreign exchange impacts resulted in a $21 million or 2% sales decline, primarily due to a weaker euro [16] Company Strategy and Development Direction - The company aims to identify unmet customer needs and leverage innovation capabilities to develop differentiated solutions at scale [22] - There is a focus on strengthening leadership in the turbo industry while developing new zero-emission and turbo technologies [22] Management Comments on Operating Environment and Future Outlook - Management remains cautious about the impact of tariffs on demand forecasts but has not noticed any material impact so far [8][21] - The 2025 outlook remains unchanged, with net sales expected to be $3.4 billion and adjusted EBIT of $457 million [21] Other Important Information - The company repurchased $30 million of common stock and paid a $12 million quarterly dividend [11][20] - A significant milestone was reached with the first series production award from Hyundai for high-speed technologies [12][24] Q&A Session Summary Question: Comments on North America sales dynamics - Management noted that gasoline sales are ramping up, but there are offsets in commercial vehicle and aftermarket segments that were slightly down [26] Question: Opportunities in gasoline for 2026 and 2027 - Management sees significant opportunities in North America, particularly with carmakers pivoting to hybrids and range-extended electric vehicles [28] Question: Market share in China and EV trends - Management feels positive about market share in China, highlighting strong demand for differentiated technology from both traditional and new carmakers [30][32] Question: Guidance on euro assumptions - Management indicated that if the euro remains above 1.1, there would be favorable impacts on revenue and EBITDA, but guidance remains unchanged for now [33] Question: Exposure to North American tariffs - Management estimates around $60 million in tariffs could be passed through, emphasizing limited exposure from Europe due to regional manufacturing [34][35]

Financial Data and Key Metrics Changes - Net sales for Q1 2025 were $878 million, slightly down year over year, but outperforming the industry in light vehicle turbo sales, with gasoline applications growing by 6% [6][12] - Adjusted EBIT was $131 million, with an adjusted EBIT margin of 14.9%, up 170 basis points compared to Q1 2024 [7][12] - Adjusted free cash flow was $36 million, in line with expectations for the quarter [7][17] Business Line Data and Key Metrics Changes - Net sales decreased by $37 million year over year, down 4% on a reported basis and 2% on a constant currency basis, with strong growth in gasoline applications offset by diesel softness [14] - The company experienced lower demand for commercial vehicles and aftermarket applications [14] Market Data and Key Metrics Changes - The company has a well-balanced sales split across geographies, with only 20% of sales in North America [8] - Foreign exchange impacts resulted in a $21 million or 2% sales decline, primarily due to a weaker euro [14] Company Strategy and Development Direction - The company aims to identify unmet customer needs and leverage innovation capabilities to develop differentiated solutions at scale [21] - Garrett is strengthening its leadership position in the turbo industry while expanding into industrial applications and developing zero-emission technologies [21] Management's Comments on Operating Environment and Future Outlook - Management remains cautious about the impact of tariffs on demand forecasts but has not noticed any material impact so far [7][20] - The 2025 outlook remains unchanged, with net sales expected to be $3.4 billion and adjusted EBIT of $457 million [20] Other Important Information - The company repurchased $30 million of common stock and paid a $12 million quarterly dividend [9][19] - A significant milestone was reached with a series production award from Hyundai for high-speed technologies, targeting production in 2027 [10][23] Q&A Session Summary Question: Comments on North America sales dynamics - Management noted that gasoline sales are ramping up, driven by North America, but there are offsets in commercial vehicle and aftermarket segments [26] Question: Opportunities in gasoline for 2026 and 2027 - Significant opportunities are seen in North America, particularly with carmakers pivoting to hybrids and range-extended electric vehicles [28] Question: Market share in China and EV trends - Management feels positive about market share in China, with strong demand for both passenger and commercial vehicles, especially in hybrids [30][32] Question: Guidance on euro exchange rate impact - If the euro remains above 1.1, there would be favorable impacts on revenue and EBITDA, but guidance remains conservative due to macro uncertainties [34] Question: Exposure to North American tariffs - The company expects to pass through approximately $60 million in tariffs, with limited exposure due to regional manufacturing strategies [35][36]

Company Performance - Garrett Motion reported quarterly earnings of $0.30 per share, exceeding the Zacks Consensus Estimate of $0.29 per share, and up from $0.28 per share a year ago [1] - The company achieved revenues of $878 million for the quarter, surpassing the Zacks Consensus Estimate by 4.15%, although this represents a decline from year-ago revenues of $915 million [3] - The earnings surprise for the quarter was 3.45%, and over the last four quarters, Garrett Motion has surpassed consensus EPS estimates three times [2] Market Position - Garrett Motion shares have increased approximately 2.1% since the beginning of the year, contrasting with a decline of 5.3% in the S&P 500 [4] - The current Zacks Rank for Garrett Motion is 3 (Hold), indicating that the shares are expected to perform in line with the market in the near future [7] Future Outlook - The consensus EPS estimate for the upcoming quarter is $0.31 on revenues of $865 million, and for the current fiscal year, it is $1.25 on revenues of $3.43 billion [8] - The estimate revisions trend for Garrett Motion is currently mixed, which may change following the recent earnings report [7] Industry Context - The Automotive - Original Equipment industry, to which Garrett Motion belongs, is currently ranked in the bottom 31% of over 250 Zacks industries, suggesting potential challenges ahead [9] - Adient, another company in the same industry, is expected to report a year-over-year earnings decline of 33.3% in its upcoming results [10]

Financial Data and Key Metrics Changes - Net sales for Q1 2025 were $878 million, slightly down year over year, but outperformed the industry in light vehicle turbo sales, with gasoline applications growing by 6% [5][11] - Adjusted EBIT was $131 million, with an adjusted EBIT margin of 14.9%, up 170 basis points compared to Q1 2024, driven by sustainable cost actions implemented in 2024 [6][12] - Adjusted free cash flow was $36 million, in line with expectations for the quarter [6][12] Business Line Data and Key Metrics Changes - Net sales decreased by $37 million year over year, down 4% on a reported basis and 2% on a constant currency basis, with strong growth in gasoline applications offset by diesel softness [13] - Commercial vehicle and aftermarket applications saw lower demand, contributing to the overall sales decline [13] Market Data and Key Metrics Changes - The company has a well-balanced sales split across geographies, with only 20% of sales in North America, allowing for resilience against regional downturns [7] - Foreign exchange impacts resulted in a $21 million or 2% sales decline, primarily due to a weaker euro [13] Company Strategy and Development Direction - The company aims to strengthen its leadership in the turbo industry while developing new zero-emission and turbo technologies, expanding into industrial applications [20] - The focus remains on identifying unmet customer needs and leveraging innovation capabilities to develop differentiated solutions at scale [20] Management's Comments on Operating Environment and Future Outlook - Management remains cautious about the impact of tariffs on demand forecasts but has not noticed any material impact so far [6][19] - The 2025 outlook remains unchanged, with net sales expected to be $3.4 billion and adjusted EBIT of $457 million, despite uncertainties surrounding tariffs and their potential impact on the global economy [19] Other Important Information - The company repurchased $30 million of common stock and paid a $12 million quarterly dividend, with a second quarterly dividend declared for June 2025 [8][18] - The company achieved a significant milestone by securing its first series production award for high-speed e-motor and inverter technology from Hyundai [10][22] Q&A Session Summary Question: Comments on North America sales dynamics - Management noted that gasoline sales are ramping up, but there are offsets in commercial vehicle and aftermarket segments that were slightly down [24][25] Question: Opportunities in gasoline for 2026 and 2027 - Significant opportunities are anticipated in North America, especially with carmakers pivoting to add more hybrids and range-extended electric vehicles [26][27] Question: Market share and EV trends in China - The company feels positive about its market share in China, with strong demand in both passenger and commercial vehicle segments [29][30] Question: Guidance on euro assumptions and FX impact - Management indicated that if the euro remains strong, there would be favorable impacts on revenue and EBITDA, but guidance remains conservative due to macro uncertainties [33] Question: Exposure to North American tariffs - The company expects to pass through approximately $60 million of tariff impacts, with limited exposure due to regional manufacturing strategies [34][35]