Delphi has posted fourth quarter profit down 44.1% on currency movements and higher commodity costs, but the figures beat analyst estimates.

Delphi's Q4 net income fell to US$192m from $344m a year earlier. However, the company generated earnings per share of US$1.39, beating analyst estimates and ahead of the previous year's US$1.32.

The company reported fourth quarter 2015 revenue of US$3.9bn, an increase of 3% from the prior year period, reflecting volume growth, partially offset by unfavourable currency impacts. Adjusted for currency exchange, commodity movements, the acquisition of HellermannTyton Group PLC and the divestiture of the company's Reception Systems business, revenue increased by 11% in the fourth quarter. Delphi said this reflects growth of 18% in Asia, 13% in Europe and 7% in North America, partially offset by a decline of 26% in South America.

For the full year 2015, Delphi reported revenue of US$15.2bn, up 6% adjusted for currency exchange, commodity movements, acquisitions and divestitures. Excluding special items, earnings from continuing operations of US$5.22 per diluted share, up 6%. Full-year adjusted operating income was put at US$1,971m for a margin of 13.0%, up 60 basis points.

"Delphi's global team delivered strong financial and operational results in 2015," said Kevin Clark, Delphi president and chief executive officer. "Despite the impacts of a challenging global marketplace, we grew organic revenue 6 percent, expanded operating margins 60 basis points and generated $1.7 billion of cash flow from operations. We also had a record of more than $26 billion in new business bookings. Delphi is well-positioned heading into 2016 and will continue to deliver on both our customer and shareholder commitments." 

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Delphi Reports Fourth Quarter and Full Year 2015 Financial Results

02/04/2016

GILLINGHAM, England--(BUSINESS WIRE)-- Delphi Automotive PLC (NYSE: DLPH), a leading global vehicle components manufacturer, today reported fourth quarter 2015 U.S. GAAP earnings from continuing operations of $0.70 per diluted share. Excluding special items, fourth quarter earnings from continuing operations totaled $1.39 per diluted share.

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Fourth Quarter Highlights Include:

Revenue of $3.9 billion, up 11% adjusted for currency exchange, commodity movements, acquisitions and divestitures

U.S. GAAP diluted earnings per share from continuing operations of $0.70

Excluding special items, earnings from continuing operations of $1.39 per diluted share, up 7%

Adjusted Operating Income of $503 million

Adjusted Operating Income margin of 13.0%

Generated $638 million of cash from continuing operations

Share repurchases and dividends of $270 million

Completed acquisition of HellermannTyton Group PLC in December 2015

Full Year 2015 Highlights Include:

Revenue of $15.2 billion, up 6% adjusted for currency exchange, commodity movements, acquisitions and divestitures

U.S. GAAP diluted earnings per share from continuing operations of $4.14

Excluding special items, earnings from continuing operations of $5.22 per diluted share, up 6%

Adjusted Operating Income of $1,971 million

Adjusted Operating Income margin of 13.0%, up 60 basis points

Generated $1,667 million of cash from continuing operations

Share repurchases and dividends of $1.4 billion

"Delphi's global team delivered strong financial and operational results in 2015," said Kevin Clark, Delphi president and chief executive officer. "Despite the impacts of a challenging global marketplace, we grew organic revenue 6 percent, expanded operating margins 60 basis points and generated $1.7 billion of cash flow from operations. We also had a record of more than $26 billion in new business bookings. Delphi is well-positioned heading into 2016 and will continue to deliver on both our customer and shareholder commitments."

Fourth Quarter 2015 Results

The Company reported fourth quarter 2015 revenue of $3.9 billion, an increase of 3% from the prior year period, reflecting volume growth, partially offset by unfavorable currency impacts. Adjusted for currency exchange, commodity movements, the acquisition of HellermannTyton Group PLC and the divestiture of the Company's Reception Systems business, revenue increased by 11% in the fourth quarter. This reflects growth of 18% in Asia, 13% in Europe and 7% in North America, partially offset by a decline of 26% in South America.

The Company reported fourth quarter 2015 U.S. GAAP net income from continuing operations of $199 million and earnings from continuing operations of $0.70 per diluted share, compared to $340 million and $1.15 per diluted share in the prior year period. Fourth quarter net income from continuing operations excluding restructuring and other special items ("Adjusted Net Income"), totaled $391 million, or $1.39 per diluted share, which includes the favorable impact of a reduced share count. Adjusted Net Income in the prior year period was $386 million, or $1.30 per diluted share.

Fourth quarter earnings before interest expense, other income (expense), net, income tax expense, equity income (loss), net of tax, income (loss) from discontinued operations, net of tax, restructuring and other special items ("Adjusted Operating Income") was $503 million, compared to $497 million in the prior year period. Despite the unfavorable impact of currency exchange, Adjusted Operating Income increased as a result of above-market growth of our businesses in Asia Pacific, Europe and North America. Adjusted Operating Income margin in the fourth quarter of 2015 was 13.0%, compared with 13.2% in the prior year period. Depreciation and amortization expense totaled $146 million in the fourth quarter, compared to $134 million in the prior year period.

Interest expense for the fourth quarter totaled $35 million, as compared to $34 million in the prior year period, which reflects the issuance of $1.3 billion in senior unsecured notes in the fourth quarter to finance the acquisition of HellermannTyton Group, PLC.

Tax expense in the fourth quarter of 2015 was $61 million, resulting in an effective tax rate of approximately 22%, compared to $74 million, or an effective tax rate of approximately 17%, in the prior year period. The increase in the effective tax rate reflects the impacts of discrete items and the geographic mix of pretax earnings.

Full Year 2015 Results

For full year 2015, the Company reported revenue of $15.2 billion, a decline of 2% from the prior year period, reflecting unfavorable currency impacts, which offset continued volume growth. Adjusted for currency exchange, commodity movements, the acquisition of HellermannTyton Group PLC and the divestiture of the Company's Reception Systems business, revenue increased by 6% during the year. This reflects growth of 12% in Asia, 7% in North America and 6% in Europe, partially offset by a decline of 19% in South America.

For full year 2015, the Company reported U.S. GAAP net income from continuing operations of $1,188 million and earnings from continuing operations of $4.14 per diluted share, compared to $1,309 million and $4.34 per diluted share in the prior year period. Full year 2015 Adjusted Net Income totaled $1,495 million, or $5.22 per diluted share, which includes the favorable impact of a reduced share count. Adjusted Net Income in the prior year period was $1,492 million, or $4.94 per diluted share.

The Company reported Adjusted Operating Income of $1,971 million for full year 2015, compared to $1,925 million in the prior year period. Adjusted Operating Income margin was 13.0% for full year 2015, an improvement of 60 basis points, compared with 12.4% in the prior year period. Despite the unfavorable impact of currency exchange, Adjusted Operating Income increased as a result of above-market growth of our businesses in Asia Pacific, Europe and North America, and the impact of successful cost reduction initiatives, including our continuing rotation to low-cost manufacturing locations in Europe. Depreciation and amortization expense totaled $540 million, comparable to $540 million in the prior year period.

Interest expense for full year 2015 totaled $127 million, a decrease from $135 million in the prior year period, which reflects the benefits of our debt refinancing transactions in the first quarters of 2015 and 2014. Additionally, the years ended December 31, 2015 and 2014 included losses on the extinguishment of debt totaling $58 million and $34 million, respectively.

Tax expense for full year 2015 was $263 million, resulting in an effective tax rate of approximately 17%, compared to $255 million, or an effective tax rate of approximately 16%, in the prior year period. The increase in the effective tax rate is primarily attributable to the geographic mix of pretax earnings.

The Company generated net cash flow from continuing operating activities of $1,667 million in 2015, compared to $2,045 million in the prior year period. Cash flow before financing totaled $961 million, compared to $1,278 million in the prior year period. As of December 31, 2015, the Company had cash and cash equivalents of $0.5 billion and total debt of $4.0 billion.

Reconciliations of Adjusted Net Income, Adjusted Net Income per Share, Adjusted Operating Income and Cash Flow Before Financing, which are non-GAAP measures, to the most directly comparable financial measures, respectively, calculated and presented in accordance with accounting principles generally accepted in the United States ("GAAP") are provided in the attached supplemental schedules.

Acquisition of HellermannTyton Group PLC

Delphi completed the acquisition of HellermannTyton Group PLC ("HellermannTyton") in December 2015. HellermannTyton is a leading global manufacturer of high-performance and innovative cable management solutions, and the acquisition expands our product offerings within the connected vehicle solutions market and further strengthens our leading position in the electrical architecture market, while providing a platform to grow HellermannTyton's adjacent industrial end markets, including aerospace, defense, alternative energy and mass transit.

Share Repurchase Program

During the fourth quarter of 2015, Delphi repurchased 2.41 million shares for approximately $200 million under its existing authorized share repurchase program, leaving approximately $507 million available for future share repurchases. Year-to-date, the Company has repurchased 14.58 million shares for approximately $1.2 billion. All repurchased shares were retired, and are reflected as a reduction of ordinary share capital for the par value of the shares, with the excess applied as reductions to additional paid-in capital and retained earnings.

Q1 and Full Year 2016 Outlook

The Company's first quarter and full year 2016 financial guidance is as follows:

(in millions, except per share amounts) Q1 2016  Full Year 2016

Revenue $4,000 - $4,100  $16,600 - $17,000

Adjusted operating income$490 - $520$2,200 - $2,300

Adjusted operating income margin12.3% - 12.7%13.3% - 13.6%

Adjusted earnings per share$1.28 - $1.38$5.80 - $6.10

Cash flow from operations$2,000

Capital expenditures$800

Adjusted effective tax rate17%17%

Conference Call and Webcast

The Company will host a conference call to discuss these results at 9:00 a.m. (ET) today, which is accessible by dialing 888.486.0553 (US domestic) or 706.634.4982 (international) or through a webcast at investor.delphi.com. The conference ID number is 26458003. A slide presentation will accompany the prepared remarks and has been posted on the investor relations section of the Company's website. A replay will be available two hours following the conference call.

Use of Non-GAAP Financial Information

This press release contains information about Delphi's financial results which are not presented in accordance with accounting principles generally accepted in the United States ("GAAP"). Specifically, Adjusted Operating Income, Adjusted Net Income, Adjusted Net Income per Share and Cash Flow Before Financing are non-GAAP financial measures. Adjusted Operating Income represents net income before interest expense, other income (expense), net, income tax expense, equity income (loss), net of tax, income (loss) from discontinued operations, net of tax, restructuring, other acquisition and portfolio project costs, asset impairments and gains (losses) on business divestitures. Other acquisition and portfolio project costs include costs incurred to integrate acquired businesses and to plan and execute product portfolio transformation actions, including business and product acquisitions and divestitures.

Adjusted Net Income represents net income attributable to Delphi before discontinued operations, restructuring and other special items, including the tax impact thereon. Adjusted Net Income Per Share represents Adjusted Net Income divided by the weighted average number of diluted shares outstanding for the period. Cash Flow Before Financing represents cash provided by (used in) operating activities from continuing operations plus cash provided by (used in) investing activities from continuing operations, adjusted for the purchase price of business acquisitions and net proceeds from the divestiture of discontinued operations.

Management believes the non-GAAP financial measures used in this press release are useful to both management and investors in their analysis of the Company's financial position and results of operations. In particular, management believes adjusted operating income, adjusted net income, adjusted net income per share and cash flow before financing are useful measures in assessing the Company's ongoing financial performance that, when reconciled to the corresponding GAAP measure, provide improved comparability between periods through the exclusion of certain items that management believes are not indicative of the Company's operating performance and that may obscure underlying business results and trends. Management also uses these non-GAAP financial measures for internal planning and forecasting purposes.

Such non-GAAP financial measures are reconciled to the most directly comparable GAAP financial measures in the attached supplemental schedules at the end of this press release. Non-GAAP measures should not be considered in isolation or as a substitute for our reported results prepared in accordance with GAAP and, as calculated, may not be comparable to other similarly titled measures of other companies.

Original source: Delphi