Garrett Motion's Q4 2024: Contradictory Signals on China Market, Product Trends, and Share Buybacks

These are the key contradictions discussed in Garrett Motion's latest 2024Q4 earnings call, specifically including: China Market Conditions, Product Adoption Trends, Demand Dynamics in China, and Share Repurchase Expectations:



Financial Performance in Challenging Industry Environment:
- Garrett Motion reported adjusted EBITDA of $153 million for Q4 2024, up $8 million from the previous year.
- This improvement was driven by variable and fixed cost productivity, deflation, and favorable product mix, despite lower volumes and unfavorable foreign exchange impacts.

Product and Market Trends:
- Sales in Europe remained flat, while declines were observed in China and North America, particularly in the light vehicle gasoline segment.
- The slight increase in commercial vehicle sales reflects the beginnings of an industry recovery in China and North America.

Capital Allocation and Shareholder Returns:
- Garrett Motion returned $296 million to shareholders in 2024 through share repurchases, representing a 13% reduction in share count.
- The company plans to continue returning value to shareholders with a new $250 million share repurchase program and $50 million in dividends in 2025.

Investment in R&D and Zero-Emission Technologies:
- The company increased spending on R&D by $12 million compared to the previous year, focusing on both turbo and zero-emission applications.
- More than 50% of R&D spending will be dedicated to zero-emission technologies in 2025, highlighting Garrett's commitment to innovation in this segment.