Delphi Technologies has reported first quarter revenue down 6% to US$1.2bn, while net income dropped from US$98m to US$16m.

"We made an encouraging start to 2019 and are reaffirming our outlook for the year," said Delphi Technologies CEO, Richard Dauch.

"Consistent with our vision to be the pioneers in propulsion technology solutions which enable vehicles to drive cleaner, better and further, we continue to have strong momentum on key initiatives that will support our long-term growth.

"Having completed my initial orientation of the company in Q1, I am even more bullish about the opportunity here at Delphi Technologies to create value for all our stakeholders.

"We are now working at pace to define, prioritise and resource the actions we will take to ensure this potential becomes a reality. Our teams are operating with a renewed sense of urgency and focus on execution and I look forward to the future with confidence."

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Delphi Technologies reports first quarter 2019 financial results

05/02/2019

Download this Press Release (PDF 971 KB)

Strong start to the year, reaffirming full year outlook

LONDON, May 2, 2019 /PRNewswire/ -- Delphi Technologies PLC (NYSE: DLPH) ("Delphi Technologies" or the "Company"), a global leader in vehicle propulsion, today reported first quarter 2019 U.S. GAAP earnings of $0.18 per diluted share. Excluding special items, first quarter earnings totaled $0.67 per diluted share. The Company also reported revenue of $1.2 billion for the quarter, a decrease of 6% compared to the respective equivalent prior period, on an adjusted basis.

First quarter highlights

Revenue of $1.2 billion, down 6%(*) year-on-year

U.S. GAAP net income of $16 million, diluted earnings per share of $0.18

Excluding special items, earnings of $0.67 per diluted share

U.S. GAAP operating income of $55 million, or 4.8% margin

Adjusted operating income of $87 million, or 7.6% margin

Generated $21 million of cash from operating activities

Returned $15 million to shareholders through share repurchases

(*) Adjusted for currency exchange

CEO comments
"We made an encouraging start to 2019 and are reaffirming our outlook for the year. Consistent with our vision to be the pioneers in propulsion technology solutions which enable vehicles to drive cleaner, better and further, we continue to have strong momentum on key initiatives that will support our long-term growth," said Richard F. Dauch, Chief Executive Officer of Delphi Technologies. "Having completed my initial orientation of the company in Q1, I am even more bullish about the opportunity here at Delphi Technologies to create value for all our stakeholders. We are now working at pace to define, prioritize and resource the actions we will take to ensure this potential becomes a reality. Our teams are operating with a renewed sense of urgency and focus on execution, and I look forward to the future with confidence."

First quarter 2019 results
The Company reported first quarter 2019 revenue of $1.2 billion, a decrease of 11% from the prior year period. Adjusted for currency exchange, revenue decreased by 6% in the first quarter. Adjusted revenue reflects a decrease of 7% in Powertrain Systems and a decrease of 6% in Aftermarket. On a regional basis, adjusted revenue also reflects growth of 3% in Europe, 8% in South America, and a decrease of 25% in Asia Pacific, and 5% in North America.

The Company reported first quarter 2019 U.S. GAAP net income of $16 million and net income of $0.18 per diluted share, compared to $98 million and $1.10 per diluted share in the prior year period. First quarter Adjusted Net Income, totaled $59 million, or $0.67 per diluted share, which compares to Adjusted Net Income in the prior year period of $116 million, or $1.30 per diluted share. The decrease in Adjusted Net Income was primarily due to unfavorable product mix, most notably a decrease in revenues of higher margin passenger car diesel fuel injection systems, and an increase in revenues of lower margin advanced gasoline direct injection fuel systems and power electronics products. In addition, the decrease in Adjusted Net Income was also impacted by decreased volume and adverse currency exchange movements, partially offset by improvements in operational performance.

First quarter U.S. GAAP operating income was $55 million, compared to $138 million in the prior year period. Adjusted Operating Income was $87 million, compared to $159 million in the prior year period. Adjusted Operating Income margin decreased 470 basis points in the first quarter of 2019 to 7.6%, compared with 12.3% in the prior year period. The decrease in Adjusted Operating Income was primarily due to unfavorable product mix as referenced above, decreased volume and adverse currency exchange movements, partially offset by improvements in operational performance. Depreciation and amortization expense (including asset impairment charges and amortization of deferred debt issuance costs) totaled $54 million in the first quarter as compared to $51 million in the prior year period.

Interest expense for the first quarter totaled $18 million, as compared to $20 million interest expense in the prior year period.

U.S. GAAP tax expense in the first quarter of 2019 was $8 million, resulting in an effective tax rate of approximately 32%, compared to $22 million, or an effective rate of 18%, in the prior year period. The increase in the effective tax rate primarily reflects the impacts of unfavorable changes in geographic income mix.

The Company generated net cash flow from operating activities of $21 million in the first quarter, compared to $75 million in the prior year period, which primarily reflects the decrease in net income partially offset by an improvement in net working capital. Capital expenditures totaled $131 million in the first quarter, compared to $66 million in the prior year period. The increased spending is primarily due to investments to support long-term growth in key technologies, particularly gasoline direct injection fuel systems and power electronics products, and becoming a stand-alone public company.

Full year 2019 outlook
The Company's full year 2019 financial outlook remains unchanged and is as follows:

(in millions, except per share amounts)

Full Year 2019

Revenue

$4,650 - $4,750

Adjusted operating income margin

~9%

Adjusted earnings per share

$3.00 - $3.20

Cash flow from operations

$320 - $350

Capital expenditures

$310 - $330

Adjusted effective tax rate

~18%


 

Key non-GAAP reconciliation items to the projected 2019 adjusted operating income are as follows (in millions):

Full Year 2019

Estimated separation charges

$45 - $50

Estimated charges for restructuring

$25 - $35

Original source: http://ir.delphi.com/investors/press-releases/press-release-details/2019/Delphi-Technologies-reports-first-quarter-2019-financial-results/default.aspx

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