PHINIA REPORTS THIRD QUARTER 2026 RESULTS, IMPROVES FULL YEAR OUTLOOK
PHINIA INC. (PHIN) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 PHINIA REPORTS THIRD QUARTER 2026 RESULTS, IMPROVES FULL YEAR OUTLOOK Auburn Hills, Michigan, October 29, 2026 – PHINIA Inc. (NYSE: PHIN), (“PHINIA”, or the “Company”), a diversified industrial supplier and global leader in the development of fuel systems, electrical
How this was made
The 30-second read
Why it matters
The updated guidance expands the sales range to $3.625‑$3.675 B and earnings to $160‑$182 M, indicating stronger performance than prior expectations.
Market read
The guidance revision provides a fresh catalyst for traders to position ahead of the upcoming conference call.
What to watch
Higher R&D spend and tariff recovery volatility could pressure margins later.
PHINIA Reports Third Quarter 2026 Results, Improves Full Year Outlook
Net sales increased 0.4% to $912 million, Adjusted EBITDA increased $2 million to $135 million, and the Company raised its full-year 2026 net sales, net earnings, Adjusted EBITDA and adjusted free cash flow guidance ranges. Operating cash flow and adjusted free cash flow declined year over year, while the Company returned $76 million of capital to shareholders.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Three Months Ended September 30, 2026 Net salesGAAP | $912M | – | 0.4% |
| Three Months Ended September 30, 2026 Gross profitGAAP | $204M | – | – |
| Three Months Ended September 30, 2026 Gross marginGAAP | 22.4% | – | – |
| Three Months Ended September 30, 2026 Selling, general and administrative expensesGAAP | $111M | – | – |
| Three Months Ended September 30, 2026 Restructuring expenseGAAP | $5M | – | – |
| Three Months Ended September 30, 2026 Other operating expense, netGAAP | $4M | – | – |
| Three Months Ended September 30, 2026 Operating incomeGAAP | $84M | – | – |
| Three Months Ended September 30, 2026 Earnings before income taxesGAAP | $70M | – | – |
| Three Months Ended September 30, 2026 Provision for income taxesGAAP | $3M | – | – |
| Three Months Ended September 30, 2026 Net earningsGAAP | $67M | – | – |
| Three Months Ended September 30, 2026 Earnings per share— dilutedGAAP | $1.80 | – | – |
| Three Months Ended September 30, 2026 Weighted average shares outstanding — dilutedGAAP | 37.1 | – | – |
| Three Months Ended September 30, 2026 Adjusted EBITDAnon-GAAP | $135M | – | $2 million |
| Three Months Ended September 30, 2026 Adjusted EBITDA marginnon-GAAP | 14.8% | – | 20 basis points (bps) |
| Three Months Ended September 30, 2026 Adjusted net earningsnon-GAAP | $68M | – | – |
| Three Months Ended September 30, 2026 Adjusted net earnings per diluted sharenon-GAAP | $1.83 | – | – |
| Three Months Ended September 30, 2026 Net cash provided by operating activitiesGAAP | $87M | – | a year-over-year decrease of $32 million |
| Three Months Ended September 30, 2026 Capital expenditures, including tooling outlaysGAAP | −$17M | – | – |
| Three Months Ended September 30, 2026 Adjusted free cash flownon-GAAP | $73M | – | a decrease of $31 million |
| Nine Months Ended September 30, 2026 Net salesGAAP | $2.73B | – | – |
| Nine Months Ended September 30, 2026 Gross profitGAAP | $608M | – | – |
| Nine Months Ended September 30, 2026 Gross marginGAAP | 22.3% | – | – |
| Nine Months Ended September 30, 2026 Operating incomeGAAP | $233M | – | – |
| Nine Months Ended September 30, 2026 Net earningsGAAP | $144M | – | – |
| Nine Months Ended September 30, 2026 Earnings per share— dilutedGAAP | $3.79 | – | – |
| Nine Months Ended September 30, 2026 Adjusted EBITDAnon-GAAP | $380M | – | – |
| Nine Months Ended September 30, 2026 Adjusted EBITDA marginnon-GAAP | 13.9% | – | – |
| Nine Months Ended September 30, 2026 Adjusted net earningsnon-GAAP | $176M | – | – |
| Nine Months Ended September 30, 2026 Adjusted net earnings per diluted sharenon-GAAP | $4.64 | – | – |
| Nine Months Ended September 30, 2026 Net cash provided by operating activitiesGAAP | $231M | – | – |
| Nine Months Ended September 30, 2026 Capital expenditures, including tooling outlaysGAAP | −$71M | – | – |
| Nine Months Ended September 30, 2026 Adjusted free cash flownon-GAAP | $189M | – | – |
| September 30, 2026 Net debtother | $657M | – | – |
| September 30, 2026 Net leveragenon-GAAP | 1.3x | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Three Months Ended September 30, 2026 Power SystemsPrimarily reflecting the non-recurrence of favorable customer pricing actions realized in the prior year and the timing of tariff recovery mechanisms with customers. | $561M | – | declined 1.8% |
| Three Months Ended September 30, 2026 Aftermarket SolutionsDriven by higher sales in the Americas, partially offset by the timing of tariff recovery mechanisms with customers. | $351M | – | increased 4.2% |
| Nine Months Ended September 30, 2026 Power SystemsNo segment driver was provided for the nine-month period. | $1.69B | – | – |
| Nine Months Ended September 30, 2026 Aftermarket SolutionsNo segment driver was provided for the nine-month period. | $1.04B | – | – |
Amounts quoted below without a unit are in millions, as in the filing’s tables. Per-share figures are as printed.
Revised Full-Year 2026 Guidance outlook
- Revenue$3,625 to $3,675 million
- Tax rate28% to 30%
- NoteNet earnings: $160 to $182 million
- NoteAdjusted EBITDA: $500 to $520 million
- NoteAdjusted EBITDA margin: 13.7% to 14.1%
- NoteAdjusted free cash flow: $220 to $250 million
- NoteUpdated guidance includes the expected fourth-quarter contribution from the recent acquisition of the stoba Group, which closed on October 1, 2026.
Capital returns
- Repurchased $65 million of common equity under existing share repurchase authorization.
- Paid $11 million in cash dividends.
- Returned $76 million of capital to shareholders during the quarter, which represents 104% of adjusted free cash flow.
- Nine Months Ended September 30, 2026 dividends paid to PHINIA stockholders: $(33) million.
- Nine Months Ended September 30, 2026 payments for purchase of treasury stock, including excise tax: $(165) million.
What drove it
- Excluding the impact of foreign currency of $4 million, net sales remained flat year over year.
- Results in both periods were impacted by tariff-related customer recovery mechanisms.
- Third quarter 2025 benefitted from net sales associated with tariff cost recoveries, while third quarter 2026 reflected reductions in net sales related to tariff cost refunds to be returned to customers.
- Excluding the effects of this tariff-related volatility, core business sales increased $21 million year-over-year.
- The year-over-year increase in Adjusted EBITDA was driven primarily by higher sales volume in the Americas and the favorable timing of tariff recovery mechanisms.
- PHINIA secured new awards spanning methanol, compressed natural gas, GDI pump, fuel injector remanufacturing, aftermarket braking, diesel, vehicle electronics and engine management systems.
Concerns
- Net cash generated by operating activities represented a year-over-year decrease of $32 million, primarily due to withholding tax payments related to cash repatriation and an unfavorable working capital impact.
- The unfavorable working capital impact was primarily driven by an increase in accounts receivable, reflecting the timing of customer collections and higher receivable balances at quarter-end.
- Adjusted free cash flow decreased $31 million compared to the third quarter of 2025.
- Increased R&D investment and the non-recurrence of favorable customer pricing actions realized in 2025 partially offset Adjusted EBITDA growth.
- Power Systems net sales declined 1.8%.
What to watch
- Delivery of revised full-year 2026 net sales guidance of $3,625 to $3,675 million.
- Delivery of revised full-year 2026 Adjusted EBITDA guidance of $500 to $520 million and Adjusted EBITDA margin guidance of 13.7% to 14.1%.
- The expected fourth-quarter contribution from the stoba Group acquisition, which closed on October 1, 2026.
- Tariff recovery mechanisms, tariff cost refunds to customers, and the effect on sales and margins.
- Working capital, accounts receivable collections, operating cash flow and adjusted free cash flow.
- Execution on new awards in targeted growth markets and aftermarket distribution expansion.
Balance sheet and cash flow
- Cash and cash equivalents as of September 30, 2026: $436 million.
- Availability under its Revolving Credit Facility: $377 million.
- Total available liquidity: $813 million.
- Total debt as of September 30, 2026: $1,093 million.
- Net debt as of September 30, 2026: $657 million.
- Net leverage: 1.3x.
- Receivables, net as of September 30, 2026: $902 million.
- Inventories as of September 30, 2026: $485 million.
- Total assets as of September 30, 2026: $3,959 million.
- Total liabilities as of September 30, 2026: $2,434 million.
- Total equity as of September 30, 2026: $1,525 million.
- Three Months Ended September 30, 2026 net cash used in investing activities: $(17) million.
- Three Months Ended September 30, 2026 net cash used in financing activities: $(6) million.
- Nine Months Ended September 30, 2026 net cash used in investing activities: $(70) million.
- Nine Months Ended September 30, 2026 net cash used in financing activities: $(87) million.
Analysis
PHINIA reported third-quarter net sales of $912 million, up 0.4% from $908 million. Excluding the impact of foreign currency of $4 million, net sales remained flat year over year. Management identified tariff-related customer recovery mechanisms as a meaningful swing factor: third-quarter 2025 benefitted from tariff cost recoveries, while third-quarter 2026 included reductions in net sales for tariff cost refunds to customers. Excluding that tariff-related volatility, core business sales increased $21 million year over year.
Segment performance was mixed. Power Systems net sales declined 1.8% to $561 million, reflecting the non-recurrence of favorable customer pricing actions realized in the prior year and tariff-recovery timing. Aftermarket Solutions net sales increased 4.2% to $351 million, driven by higher sales in the Americas, partly offset by the timing of tariff recovery mechanisms. The Company also cited continued aftermarket momentum and new award activity across alternative fuels, fuel injection, range-extender applications, remanufacturing, braking, and vehicle electronics.
Profitability improved at the adjusted EBITDA level. Adjusted EBITDA rose $2 million to $135 million, and Adjusted EBITDA margin increased 20 basis points to 14.8%. Management attributed the improvement primarily to higher sales volume in the Americas and favorable tariff-recovery timing, partially offset by increased R&D investment and the non-recurrence of favorable 2025 pricing actions. GAAP operating income was $84 million, compared with $34 million, while net earnings were $67 million, compared with $13 million. Adjusted net earnings per diluted share were $1.83, compared with $1.59.
Cash conversion was softer in the quarter. Net cash provided by operating activities was $87 million, down $32 million year over year, and adjusted free cash flow was $73 million, down $31 million. The Company cited withholding tax payments related to cash repatriation and an unfavorable working-capital impact, primarily higher accounts receivable tied to customer collection timing and higher quarter-end receivable balances. PHINIA repurchased $65 million of common equity and paid $11 million in cash dividends, returning $76 million of capital to shareholders.
The Company improved its full-year 2026 outlook. Revised net sales guidance is $3,625 to $3,675 million, net earnings guidance is $160 to $182 million, Adjusted EBITDA guidance is $500 to $520 million, and adjusted free cash flow guidance is $220 to $250 million. Revised guidance includes the expected fourth-quarter contribution from the stoba Group acquisition, which closed on October 1, 2026. The revised adjusted tax-rate range is 28% to 30%, while adjusted EBITDA margin guidance is 13.7% to 14.1%.
Management, verbatim
Our third quarter results were consistent with our expectations and reflect stable end market demand, continued aftermarket momentum, and strong financial discipline.
Brady Ericson, President and Chief Executive Officer of PHINIA
We generated another quarter of profitable growth, with Adjusted EBITDA increasing $2 million, or 20 bps, despite higher R&D spending and investments in customer relationships, demonstrating the resilience of our business and consistent execution.
Brady Ericson, President and Chief Executive Officer of PHINIA
Importantly, we returned $76 million of capital to shareholders during the quarter, which represents 104% of adjusted free cash flow, and we remain committed to our balanced capital allocation strategy, which is focused on investments for growth, strategic acquisitions, and capital returns.
Brady Ericson, President and Chief Executive Officer of PHINIA
Not in the filing
stated, not guessed- Prior-quarter comparisons were not reported for the presented operating metrics.
- GAAP operating margin was not reported.
- A GAAP effective tax rate was not reported.
- Full-year 2026 guidance for gross margin and operating expenses was not reported.
- A prior earnings-release outlook section was not provided; therefore, no actual-versus-prior-guidance comparison is included.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
PHINIA Inc. filed a Form 8‑K reporting Q3 2026 results and revised its FY 2026 outlook.
Ticker impact
issued updated guidance for FY 2026 after Q3 results
likely upward pressure as the market prices in the higher guidance
The company reported flat sales but improved margins and increased free cash flow, then updated guidance to a higher range, which typically supports the stock.
Market effects
Industrial supplier sector may see modest uplift as PHIN signals demand resilience.
U.S. industrials could benefit from the guidance lift.
Limited to investors tracking mid‑cap industrials.
Counterpoint
Guidance lift may be modest relative to peers; price could be already priced in.
Key entities
- companyPHINIA Inc.
Diversified industrial supplier listed on NYSE.
