Oct 29, 2026 earnings call — Industrial growth and margin expansion
Net sales were $930 million, up 3% organically, and Adjusted EBIT was $152 million with a 16.3% margin.
Revenue $0.9B (est $0.9B) · EPS $0.51 (est $0.45) · Next-quarter revenue outlook $3.8B
Key quotes
"Based on this momentum, we now expect industrial sales to reach $230 million this year and about $300 million in 2027."
"In turbo, we launched a new high-volume E-Turbo with Mercedes."
"Today, we are announcing that our board of directors authorized a new $250 million share repurchase program for 2027."
Analyst Q&A 5
Genset vs other industrial products
Q (James Mulholland · Deutsche Bank): He asked how much of the $300 million in industrial sales next year is genset versus other products, and whether genset could be larger long term (even up to $500 million). He also asked if Trane and Ingersoll deals need to be bigger to hit 2030 goals.
A: They said the $300 million industrial sales today are mostly genset and that it will already be above $250 million by next year. They said E-Cooling Compressor will begin ramping but its 2027 revenue impact will be smaller than genset. They also said it is too early to size individual contracts and they will provide updates next year.
"Indeed, when you look at the $300 million that we are doing industrial sales today, this is mostly genset." — Olivier Rabiller (CEO)
Multistack deal and margin impact
Q (Nathan Jones · Stifel): He asked for more color on the Multistack agreement: how big the opportunity is, when production starts, and how it ramps. He also asked how faster growth in industrial and HVAC will affect margins.
A: They said the Multistack deal covers several products and starts with products already announced that are ramping from 2027; they plan to start delivering next year but it is premature to size the opportunity. On margins, they said industrial and HVAC have favorable margins and as those businesses grow and production capacity is put in place, mix will drive margin expansion over time, albeit subject to capacity and cautious CapEx.
"It starts with the products that we have already announced are ramping up from 2027." — Olivier Rabiller (CEO)
Trane testing and margin timing
Q (Jake Scholl · BNP): He asked what the Trane field tests showed about system efficiency and what revenue path to expect after testing. He also asked at what sales level they would see material margin uplift from industrial and HVAC.
A: They said the Trane tests confirmed their performance expectations versus existing solutions and the tests were very positive, but timing, applications and customer programs are still in flux as they finalize launch plans. For margins, they said more sales and ramping production lines improve margins, but mix with light vehicle volumes and the need to deploy capacity mean they could not give a specific sales threshold for material uplift.
"The first thing I would say is that the tests have really confirmed all the expectations we were having in terms of performance versus performance benefit versus existing solutions." — Olivier Rabiller (CEO)
2027 outlook and China export quotas
Q (Rajat Gupta · JPMorgan): He asked for preliminary views on the rest of the business for 2027, commercial vehicle trends, regional light vehicle production, and whether they can sustain mid-single digit organic growth. He also asked about implications of possible export quotas from China to Europe.
A: They said they cannot predict the automotive industry precisely and they plan costs conservatively. They said industrial is the part they understand and control best and that gives the most certainty—hence the $300 million industrial outlook for next year. On export quotas, they said any measure that stabilizes the situation would be welcome but it is too early to comment until details and impacts on customers are known.
"What we see is clearly, and the part that we understand the best, the part that we control the best, is indeed industrial, because you are less subject to the movement of an overall industry right now." — Olivier Rabiller (CEO)
China exports and gasoline decline
Q (Hamed Khorsand · BWS Financial): He asked when they expect sales from Chinese exports as they win product business there, and what drove the decline in gasoline this past quarter and whether it will continue.
A: They said they are already generating sales from Chinese exports and that their turbos are going on engines in Chinese vehicles that are being exported today. They said the gasoline decline was driven mainly by movements in Asia, especially a weaker domestic market in China, and that tariff pass-throughs have negatively impacted revenue as well.
"We know that our turbos are going on to engines in Chinese vehicles that are being exported today." — Sean Deason (CFO)