Phinia Inc. reported its fourth-quarter and full-year results for the period ending December 31, 2023. The company reported fourth quarter net sales totaling $882 million, marking a 3.6% increase compared with Q4 2022. This excludes $24 million of contract manufacturing sales, which saw a slight increase compared to the same period in 2022.

“Our Q4 results were stronger than expected,” said Brady Ericson, Phinia’s president and CEO. “I’m pleased with our teams’ focus on serving our customers while closing out 2023 with solid cost and margin performance.”

Other Q4 highlights include:

• Operating income stood at $81 million, with adjusted operating income reaching $89 million, resulting in operating and adjusted operating margins of 9.2% and 10.4%, respectively.
• Segment adjusted operating margins for Q4 2023 were 12.6%, outpacing the average segment adjusted operating margin for the first nine months of the year by 90 basis points.
• Net earnings were reported at $0.70 per diluted share, or $0.71 per diluted share excluding non-comparable items.
• Net cash provided by operating activities amounted to $62 million, with adjusted free cash flow totaling $55 million.

For the full year 2023, Phinia reported:

• U.S. GAAP net sales reached $3,500 million, reflecting a 4.5% increase compared with 2022.
• Operating income was $241 million, with adjusted operating income at $347 million, resulting in operating and adjusted operating margins of 6.9% and 10.1%, respectively.
• Net earnings were reported at $2.17 per diluted share, or $4.13 per diluted share excluding non-comparable items.
• Net cash provided by operating activities amounted to $250 million, with adjusted free cash flow totaling $161 million

The company also celebrated wins in strategic growth markets, including a conquest business win to supply GDi fuel systems to an OEM specializing in hybrid and low emission powertrain technology in the light vehicle segment for their European and Asian business. The company also said it signed a contract to supply heavy-duty Diesel Fuel Systems to a lglobal OEM, extending an existing relationship in the core commercial vehicle segment.

Phinia also reported that it is supplying medium-duty Diesel Fuel Systems to a global OEM, securing existing business and expanding market share in the commercial vehicle segment.

2024 Outlook

Phinia reported that it expects strong earnings and cash generation in 2024, driven by operational efficiencies, agreements with its former parent and growth in aftermarket sales. Industry-wide CV volumes in 2024 are expected to decline mid to high single digits percent in North America and Europe, while other global CV markets are expected to see slight increases. Global LV volumes are expected to decrease slightly with engine production declining mid-single digits.

For 2024, Phinia expects net sales of $3.42 billion to $3.57 billion, adjusted sales of $3.4 billion to $3.55 billion, net earnings and margin of $125 million to $160 million and 3.7% to 4.5%, respectively, adjusted EBITDA of $470 million to $510 million, and adjusted EBITDA margins of 13.8% to 14.4%. Phinia said it also expects to generate $160 to $200 million in adjusted free cash flow.