Phinia Lowers Annual Earnings Guidance Despite Sales Growth
The fuel-systems supplier reported adjusted free cash flow of $74 million for the second quarter.
Phinia (PHIN) reported second-quarter net sales of $940 million, a 5.6% increase from the $890 million recorded in the same period last year.
The fuel-systems supplier saw growth tempered by currency fluctuations and acquisition impacts. Excluding foreign currency and the SEM acquisition, sales rose 1.2%, or $11 million, as volume gains in the Americas were offset by tariff recoveries.
Net earnings fell $6 million year-over-year to $40 million. Net margin compressed 90 basis points to 4.3% compared to the second quarter of 2024.
Adjusted EBITDA rose $4 million to $130 million. The adjusted EBITDA margin declined 40 basis points to 13.8% due to unfavorable product mix and higher employee costs.
Cash flow metrics improved during the period. Adjusted free cash flow rose to $74 million from $20 million a year earlier, driven by lower capital expenditures, working capital discipline and inventory optimization. Net cash generated by operating activities increased $34 million to $91 million.
Phinia lowered its full-year 2024 net earnings guidance to a range of $155 million to $180 million, down from the $165 million to $195 million projected in the first quarter. The company narrowed its full-year net sales guidance to between $3.57 billion and $3.67 billion, representing 2% to 5% year-over-year growth. Adjusted EBITDA for the year is expected to be between $485 million and $515 million.
The company entered into a definitive agreement on June 30, 2024, to acquire the stoba Group, with the transaction expected to close in the fourth quarter of 2024.