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Titan International (NYSE:TWI) reported second-quarter 2026 revenue of $485 million and adjusted EBITDA of $34 million, with management citing growth in its consumer business, tariff refunds and cost-reduction efforts as contributors to the quarter’s performance.
Revenue increased 5.2% from the prior-year period, while adjusted EBITDA exceeded the top end of the company’s guidance range, according to Senior Vice President and Chief Financial Officer Tony Eheli. Free cash flow totaled $26 million, operating cash flow was $39 million, and net debt declined to $413 million at quarter-end from $441 million at the end of the first quarter.
Consumer Growth Offsets Agricultural Pressure
Titan’s consumer segment led growth in the quarter, with sales rising 27% year over year. Eheli said the company’s Titan Specialty line saw a notable rebound in demand, and reported segment gross margin increased to 23.7% from 20.4% a year earlier.
The consumer segment’s results included $4.6 million of net tariff refunds that reduced cost of goods sold. Eheli noted that tariffs had also increased input costs in prior periods, making their overall effect on year-over-year comparisons difficult to isolate.
Reitz attributed consumer momentum partly to new-product launches and original-equipment manufacturer wins. He said Titan has introduced more new products in its consumer business since acquiring it about two and a half years ago than had been launched in the preceding 15 years. The company is also using the Goodyear brand in its product strategy, which Reitz said could support premium pricing, margins and future growth.
In the earthmoving, construction and mining, or EMC, segment, sales rose 1.4% from the prior year and gross margin improved to 12.5% from 11.5%. Foreign-currency translation added 3.2% to EMC revenue. While North American construction OEM demand softened modestly from the first quarter, Eheli said productivity and cost-reduction actions at production facilities supported margins.
Reitz said EMC activity had shown greater stability heading into the second half of the year. The company has significant European exposure in the segment, as well as operations in Brazil outside the agricultural market, which he said have performed well.
Agricultural Market Remains Challenging
Agricultural segment sales declined 5% from the prior-year quarter, as lower farm income and elevated financing costs continued to weigh on equipment purchases. Segment gross margin fell to 11.4% from 14.6% a year earlier, reflecting lower fixed-cost leverage and higher input costs.
Management said conditions in Brazil remain particularly difficult. Eheli cited high interest rates, political uncertainty before the country’s presidential election, elevated fertilizer costs tied to the Russia-Ukraine war, and high OEM and dealer inventory levels. Reitz said Brazil’s farmers were more exposed to higher fertilizer costs because they had not purchased fertilizer in advance to the same extent as U.S. farmers.
Reitz said Titan views the current agricultural downturn as exceptional rather than a structural change in replacement cycles. He said dealers have worked to reduce equipment inventory and that aging equipment, improving commodity-price conditions and better-positioned used-equipment inventories could provide a foundation for recovery in 2027. However, management no longer expects customer activity to accelerate materially in the fourth quarter ahead of an early-2027 agricultural recovery.
Titan emphasized the importance of its aftermarket business, which represents about 45% of aggregate sales. Reitz said continued equipment use in farming, construction, mining and other end markets supports replacement demand for tires, tracks and related products even during softer economic conditions.
Guidance Maintained, With Sales Expected in Lower Half of Range
For the third quarter, Titan forecast revenue of $440 million to $460 million and adjusted EBITDA of $27 million to $33 million. The company maintained its full-year 2026 guidance for revenue of $1.85 billion to $1.95 billion and adjusted EBITDA of $105 million to $115 million.
However, Eheli said full-year sales are now expected to trend toward the lower half of the revenue range, representing modest year-over-year growth, because agricultural market conditions remain uncertain.
The company expects tax expense of $4 million to $5 million in the third quarter. Second-quarter tax expense was approximately zero, which Eheli attributed to discrete tax benefits and the geographic mix of earnings.
Titan expects an additional $7 million to $9 million in net tariff refunds over the remainder of 2026, including about $6 million in the third quarter, with the remaining balance anticipated in the fourth quarter. Management said it intends to reinvest the proceeds in initiatives aimed at improving product offerings and customer value.
Transformation Program Targets Operating Improvements
Chief Transformation Officer David Martin, who previously served as Titan’s CFO, outlined a transformation program focused on applying analytics, automation and artificial intelligence across manufacturing, supply chain, product development and administrative functions.
Early projects include plant-level industrial analytics pilots, supply-chain analytics improvements, contract lifecycle management, an AI-driven sales tool, product-development cycle initiatives and a new human-capital-management foundation through Workday.
Martin said the initiatives are intended to improve throughput, quality, inventory management, working capital, productivity and decision-making. Titan identified opportunities expected to generate up to $15 million in operating improvements over the next three years, though Martin described the target as “aggressive and aspirational.” The company expects benefits to begin in 2027, with a target of $3 million in improvements by the end of next year.
Management said the transformation investments will be funded within Titan’s existing capital-expenditure plans and will not require higher CapEx. Eheli added that expected benefits from a plant consolidation are also expected to begin in the first quarter of 2027.
About Titan International (NYSE:TWI)
Titan International, Inc is a leading global manufacturer of wheels, tires and undercarriage systems designed for off-highway vehicles. The company serves a diverse range of markets including agricultural, construction, earthmoving and consumer segments. Titan’s product portfolio encompasses a variety of tire sizes and tread designs, steel and cast centers, wheels, tracks and complete wheel‐and‐tire assemblies tailored to meet the needs of tractors, combines, skid steers, loaders, haul trucks and other specialized equipment.
In addition to original equipment manufacturing, Titan provides extensive aftermarket support through its network of distributors and sales offices.
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