Key Highlights

  • Adjusted EPS of USD 1.83 topped the consensus estimate of USD 1.68, while GAAP diluted EPS reached USD 1.80.
  • Net sales of USD 912 million missed the consensus estimate of USD 928.21 million, hurt by Tariff timing.
  • Record adjusted EBITDA of USD 135 million carried a 14.8% margin, up 20 basis points from a year earlier.
  • Full year Revenue guidance narrowed to USD 3.625 to 3.675 billion, adjusted EBITDA to USD 500 to 520 million.

PHINIA Inc. (NYSE:PHIN) reported third quarter 2026 adjusted Earnings per diluted share, excluding nonoperating items, of USD 1.83, above a consensus estimate of USD 1.68 and 15.1% higher than USD 1.59 a year earlier. GAAP diluted EPS was USD 1.80 versus USD 0.33, and net earnings were USD 67 million versus USD 13 million. Net sales of USD 912 million were below a consensus estimate of USD 928.21 million and up USD 4 million, or 0.4%, from USD 908 million. The company said a USD 21 million swing from the timing of tariff recoveries held down sales.

Segment Margins and Capital Returns

Adjusted EBITDA reached a record USD 135 million, a Margin of 14.8%, as favorable product mix and tariff effects were partly offset by customer pricing and R&D timing. Total segment adjusted Operating Income was a record USD 128 million, a 14% margin. Power Systems posted a 12.1% margin on slightly lower sales, and Aftermarket Solutions posted a 17.1% margin on sales up more than 4%. Operating income was USD 84 million against USD 34 million, which had included USD 57 million of other operating expense.

The company returned USD 76 million to shareholders, split between USD 65 million of Buybacks and USD 11 million of dividends, with USD 151 million left on the repurchase authorization. Operating Cash Flow was USD 87 million and adjusted free cash flow was USD 73 million. Net Leverage stood at 1.3 times against a long term target of 1.5 times, and cash totaled USD 436 million within USD 813 million of liquidity. The adjusted tax rate was 23%.

Guidance Details and New Business

The full year 2026 outlook now has net sales of USD 3.625 billion to USD 3.675 billion, with the low end raised by USD 60 million and the high end by USD 10 million, and adjusted EBITDA of USD 500 million to USD 520 million at a margin of 13.7% to 14.1%. Adjusted free cash flow is guided to USD 220 million to USD 250 million and the adjusted tax rate to 28% to 30%. The midpoint of sales includes one quarter of results from STOBA Group, and the outlook excludes future policy changes such as added tariffs.

Chief Executive Officer Brady Ericson said the quarter was in line with plan and pointed to new awards, including a first methanol engine program in China and a compressed Natural Gas injector program in India. He also said aerospace pursuits grew to 8 customers across 13 potential programs, with sourcing decisions due late this year and into 2027.

Dated Items and Figures Behind the Next Report

STOBA Group closed on October 1, 2026, funded from available liquidity, and adds two aerospace and defense qualified locations, so fourth quarter sales carry a first contribution. Net R&D has run in the mid 3% range of sales in the first half and is projected in the mid 2% range in the second half, against an annual target of about 3%. About 40% of sales have moved onto the new SAP system, with the next wave planned for 2027. The guided adjusted tax rate of 28% to 30% compares with the 23% rate in the quarter.