PHINIA Board Declares Quarterly Dividend of $0.25 per Common Share and Authorizes $250 Million Increase to Share Repurchase Program

Rhea-AI Summary

PHINIA Inc. (NYSE: PHIN), a leader in premium fuel systems, electrical systems, and aftermarket products, has announced two significant decisions by its Board of Directors. Firstly, a quarterly cash dividend of $0.25 per common share has been declared, payable on September 13, 2024, to shareholders of record as of August 23, 2024. Secondly, the Board has authorized a $250 million increase to its share repurchase program, bringing the total available for repurchases to approximately $263 million.

The expanded share repurchase program allows PHINIA to buy back its common shares through various methods, including open market transactions and privately negotiated deals. The program has no expiration date and can be adjusted as needed, providing flexibility in the company's capital allocation strategy.

Positive

• Quarterly dividend of $0.25 per share announced, indicating stable cash flow
• $250 million increase in share repurchase program, potentially boosting shareholder value
• Total of $263 million now available for share repurchases, showing strong financial position
• Flexible repurchase program with no expiration date, allowing for strategic buybacks

Negative

• None.

Insights

Financial Analyst

PHINIA's recent announcement of a quarterly dividend and expansion of its share repurchase program signals a strong commitment to shareholder returns. The $0.25 per share dividend, payable in September 2024, demonstrates the company's confidence in its cash flow generation and financial stability.

More notably, the $250 million increase to the share repurchase program, bringing the total available to approximately $263 million, is a significant move. This 167% increase from the previous $150 million authorization suggests management's belief that the stock is undervalued and represents a good investment opportunity.

The flexibility in the repurchase program's execution, including open market transactions and accelerated stock repurchase programs, allows PHINIA to optimize its capital allocation strategy. However, investors should note that the actual impact on earnings per share and stock price will depend on the timing and volume of repurchases, as well as market conditions.

While these shareholder-friendly actions are generally positive, they should be viewed in the context of PHINIA's overall financial health, growth prospects and industry position. It's important to assess whether this capital allocation strategy balances short-term shareholder returns with long-term investments in research and development or strategic acquisitions that could drive future growth in the automotive components sector.

Market Research Analyst

PHINIA's decision to increase its share repurchase program by $250 million is a strategic move that warrants attention in the context of the automotive supply chain industry. This action suggests management's confidence in the company's future prospects and potentially indicates their belief that the stock is undervalued in the current market.

The automotive components sector, particularly in fuel systems and electrical systems, is undergoing significant transformation due to the shift towards electric vehicles and more stringent emissions regulations. PHINIA's commitment to returning capital to shareholders through dividends and buybacks could be interpreted as a sign of strong cash flow generation despite these industry headwinds.

However, it's essential to consider the opportunity cost of this capital allocation decision. The $263 million now available for share repurchases represents a substantial sum that could alternatively be invested in research and development, technological advancements, or strategic acquisitions to position the company for future growth in an evolving automotive landscape.

Investors should also consider how this move compares to PHINIA's peers in the industry. If competitors are heavily investing in new technologies or expanding their product portfolios, PHINIA's focus on shareholder returns could potentially impact its long-term competitive position. The balance between short-term shareholder value and long-term strategic investments will be important for PHINIA's success in a rapidly changing automotive supply chain environment.

 

AUBURN HILLS, Mich.--(BUSINESS WIRE)-- PHINIA Inc. (“PHINIA” or the “Company”) (NYSE: PHIN), a leader in premium fuel systems, electrical systems, and aftermarket products, today announced that its Board of Directors has declared a quarterly cash dividend in the amount of $0.25 per common share, payable on September 13, 2024, to shareholders of record at the close of business on August 23, 2024.

The Board of Directors also authorized a $250 million increase to its previously approved $150 million share repurchase program. Including the $250 million increase announced today, approximately $263 million is available under the Company’s repurchase program. Under the share repurchase program, the Company's common shares may be repurchased in open market transactions, in privately negotiated transactions, pursuant to one or more accelerated stock repurchase programs, through the use of Rule 10b5-1 plans, or in such other manner in compliance with the requirements of the Securities and Exchange Commission. The exact amount and timing of any purchases will depend on a number of factors, including trading price, trading volume, and general market conditions. The repurchase program has no expiration date and may be suspended, discontinued, or resumed at any time.

About PHINIA

PHINIA is an independent, market-leading, premium solutions and components provider, with over 100 years of manufacturing expertise and industry relationships and a strong brand portfolio that includes DELPHI®, DELCO REMY® and HARTRIDGE®. With over 13,000 employees across 44 locations in 20 countries, PHINIA is headquartered in Auburn Hills, Michigan, USA.

Across commercial vehicles and industrial applications (heavy-duty and medium-duty trucks, off-highway construction, marine, aviation, and agricultural), and light vehicles (passenger cars, trucks, vans and sport-utility), we develop fuel systems, electrical systems, and aftermarket solutions designed to keep combustion engines operating at peak performance, while at the same time investing in advanced technologies to unlock the potential of alternative fuels.

By providing what the market needs today to become more efficient and sustainable, while also developing innovative products and solutions to contribute to lower carbon mobility, we are the partner of choice for a diverse array of customers – powering our shared journey toward a cleaner tomorrow.

(DELCO REMY is a registered trademark of General Motors LLC, licensed to PHINIA Technologies Inc.)

Category: IR

View source version on businesswire.com: https://www.businesswire.com/news/home/20240801616266/en/

IR contact:

Kellen Ferris

Vice President, Investor Relations

investors@phinia.com

+1 947-262-5256

Media contact:

Kevin Price

Global Brand & Communications Director

media@phinia.com

+44 (0) 7795 463871

Source: PHINIA INC

FAQ

When will PHINIA (PHIN) pay its next quarterly dividend?

PHINIA (PHIN) will pay its next quarterly dividend of $0.25 per common share on September 13, 2024, to shareholders of record as of August 23, 2024.

How much did PHINIA (PHIN) increase its share repurchase program by?

PHINIA (PHIN) increased its share repurchase program by $250 million, bringing the total available for repurchases to approximately $263 million.

Does PHINIA's (PHIN) share repurchase program have an expiration date?

No, PHINIA's (PHIN) share repurchase program does not have an expiration date and can be suspended, discontinued, or resumed at any time.

What methods can PHINIA (PHIN) use to repurchase its shares?

PHINIA (PHIN) can repurchase its shares through open market transactions, privately negotiated transactions, accelerated stock repurchase programs, Rule 10b5-1 plans, or other compliant methods.