Phinia Narrows 2026 Sales Outlook After Slower Growth

The Tip Desk · July 31, 2026 · 3 min read

Second-quarter sales reached $940 million as organic growth cooled to 1.2% and the company cut its full-year sales range.

PHINIA Inc. (PHIN), a diversified industrial supplier of fuel systems, electrical systems, and aftermarket solutions, reported second-quarter net sales of $940 million, up 5.6% from a year earlier, as year-over-year growth slowed from the first quarter’s 10.3% pace.

Excluding foreign currency and the acquisition of Swedish Electromagnet Invest AB, sales rose $11 million, or 1.2%, primarily on volumes in the Americas, partially offset by tariff recoveries. That organic rate compared with 3.6% in the first quarter.

Fuel Systems net sales were $584 million. Aftermarket net sales were $356 million.

Net earnings were $40 million, or $1.05 a share, down from $46 million and $1.14 a share a year earlier. Net margin was 4.3%. Adjusted net earnings were $58 million, or $1.53 a share, up from $51 million and $1.27 a share.

Adjusted EBITDA was $130 million, up $4 million from a year earlier, driven primarily by net tariff refunds and SEM, partially offset by higher employee costs tied to variable and stock-based compensation. Adjusted EBITDA margin was 13.8%, down 40 basis points, as employee-related costs and unfavorable product mix more than offset the margin benefit of tariff recoveries.

Gross profit was $216 million and gross margin was 23.0%. Operating income was $80 million.

Cash generation strengthened. Net cash from operating activities was $91 million. Adjusted free cash flow was $74 million, up $54 million from $20 million a year earlier, attributed to inventory optimization, working-capital discipline, and lower capital expenditures. Cash and cash equivalents were $370 million, with $450 million of available capacity under its revolving credit facility. Total debt was $1,019 million.

The company returned $53 million to shareholders through $42 million of share repurchases and $11 million in dividends.

On June 30, 2026, PHINIA entered a definitive agreement to acquire the stoba Group, a technology partner in high-precision components and customized manufacturing. The transaction is expected to close in the fourth quarter of 2026, subject to customary regulatory approvals. President and Chief Executive Officer Brady Ericson said the planned acquisition would expand manufacturing capabilities and reinforce supply-chain resilience.

Second-quarter wins included a heated-tip multi-point fuel injection system for a passenger-vehicle engine, a 24V starter program for a Class 8 commercial vehicle, a complete common rail system for agricultural applications, and the opening of vehicle electronics distribution with a pan-European distributor. The company also cited aftermarket expansion across North Africa, Eastern Europe, the Americas, China, Southeast Asia, and Oceania.

PHINIA is refining its 2026 guidance and now expects net sales of $3.57 billion to $3.67 billion, implying 2% to 5% year-over-year growth, compared with a prior range of $3.52 billion to $3.72 billion, or 1% to 7%. Net earnings are projected at $155 million to $180 million, with net earnings margin of 4.3% to 4.9%. Adjusted EBITDA is projected at $485 million to $515 million, with adjusted EBITDA margin of 13.5% to 14.1%. Adjusted free cash flow is expected at $210 million to $250 million. The adjusted tax rate is expected at 30% to 33%.

The company remains focused on driving profitable growth and delivering long-term value as it navigates a dynamic operating environment.