Garrett Motion Reports 14% Decline in Net Sales for Q3 2024, 10.5% for Nine Months

Garrett Motion Inc. reported a decline in net sales for the third quarter and the first nine months of 2024 compared to the same periods in 2023. For the three months ended September 30, 2024, net sales totaled $826 million, down 14% from $960 million in Q3 2023. For the nine months ended September 30, 2024, net sales were $2,631 million, a decrease of 10.5% from $2,941 million in the prior year. The decline was attributed to reduced demand across key product lines, particularly gasoline and diesel products, which saw decreases of 19% and 21%, respectively.

Despite the drop in sales, Garrett Motion's gross profit for Q3 2024 was $166 million, slightly down from $176 million in Q3 2023. The cost of goods sold decreased to $660 million from $784 million, reflecting a reduction in sales volumes and commodity costs. The gross profit margin improved to 19.9% for the nine months ended September 30, 2024, compared to 19.3% in the same period of 2023.

Net income for Q3 2024 was $52 million, a decrease from $57 million in Q3 2023. For the nine months ended September 30, 2024, net income was $182 million, down from $209 million in the prior year. The effective tax rate increased to 31.6% in Q3 2024 from 18.6% in Q3 2023, primarily due to a global mix of earnings and adjustments to tax reserves.

Garrett Motion's cash and cash equivalents decreased significantly to $96 million as of September 30, 2024, from $259 million at the end of 2023. Total assets also declined to $2,155 million from $2,527 million, while total liabilities decreased to $2,933 million from $3,262 million. The company reported a retained deficit of $(1,740) million, an improvement from $(1,922) million at the end of 2023.

Strategically, Garrett Motion completed an offering of $800 million in 7.75% Senior Unsecured Notes due May 31, 2032, in May 2024, which was used to repay term loan indebtedness. The company also repurchased $226 million of common stock under a $350 million share repurchase program authorized in February 2024. Additionally, Garrett Motion divested an equity interest in an unconsolidated joint venture for approximately $58 million, recognizing a pre-tax gain of $27 million.

Overall, Garrett Motion's financial performance in 2024 reflects challenges in sales and profitability, alongside strategic financial maneuvers aimed at debt reduction and shareholder returns.