Delphi Technologies has unveiled second-quarter net income of US$86m, up from US$48m in the same period last year.

Revenue rose 1% year-on-year to US$1.2bn and to US$2.5bn for the year-to-date period.

The US supplier has updated its full-year outlook for 2018, with revenue now expected to be in the range of US$5bn - US$5.1bn.

"Our business performed well during the second quarter," said Delphi Technologies CEO, Liam Butterworth. "While revenue growth moderated, we expanded our operating margin and generated strong operating cash flow.

"During the first half of the year, we achieved US$5.3bn in bookings in key technologies which continues to reinforce our confidence in Delphi Technologies' long term growth prospects.

"In addition, I am pleased to announce our board of directors has approved a new US$100m share repurchase authorisation while maintaining our quarterly dividend."

Prior to December 4, 2017, Delphi Technologies operated as the Powertrain Systems segment of Delphi Automotive.

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Aug 8, 2018

Delphi Technologies reports second quarter 2018 financial results, updates full year outlook

Strong momentum in key technologies continues with bookings of $5.3 billion in the first half of the year

LONDON - August 8, 2018 - Delphi Technologies PLC (NYSE: DLPH) ("Delphi Technologies" or the "Company"), a global leader in vehicle propulsion, today reported second quarter 2018 U.S. GAAP earnings of $0.97 per diluted share. Excluding special items, second quarter earnings totaled $1.29 per diluted share. The Company also reported revenue of $1.2 billion for the quarter and $2.5 billion for the year-to-date period, an increase of 1% and 3% compared to the respective equivalent prior period, on an adjusted basis.

Prior to December 4, 2017, Delphi Technologies operated as the Powertrain Systems segment of Delphi Automotive PLC (the "former parent") and the historical financial information presented in this press release for periods prior to December 4, 2017 were derived from the former parent's accounting records and are presented on a carve-out basis as if Delphi Technologies had operated as a stand-alone company for all periods presented.

Second quarter highlights

Revenue of $1.2 billion, up 1%(*) year-on-year

U.S. GAAP net income of $86 million, diluted earnings per share of $0.97

Excluding special items, earnings of $1.29 per diluted share

U.S. GAAP operating income of $122 million, or 9.9% margin

Adjusted operating income of $156 million, or 12.7% margin

$164 million of cash from operating activities

Quarterly dividend payment of $15 million

Year-to-date highlights

Revenue of $2.5 billion, up 3%(*) year-on-year

U.S. GAAP net income of $184 million, diluted earnings per share of $2.07

Excluding special items, earnings of $2.60 per diluted share

U.S. GAAP operating income of $260 million, or 10.3% margin

Adjusted operating income of $315 million, or 12.5% margin

$239 million of cash from operating activities

Dividend payments of $30 million

(*) Adjusted for currency exchange and certain aftermarket revenue retained by the former parent
 

Full year outlook updated

The Company has updated its full year outlook for 2018. Revenue is now expected to be in the range of $5.0 - $5.1 billion. Adjusted Operating Income margin is now expected to be in the range of 12.1% - 12.3%. Adjusted earnings per share is now expected to be in the range of $4.65 - $4.85.

CEO comments

"Our business performed well during the second quarter. While revenue growth moderated, we expanded our operating margin and generated strong operating cash flow. During the first half of the year, we achieved $5.3 billion in bookings in key technologies which continues to reinforce our confidence in Delphi Technologies' long term growth prospects" said Liam Butterworth, President and Chief Executive Officer for Delphi Technologies. "In addition, I am pleased to announce that our Board of Directors has approved a new $100 million share repurchase authorization while maintaining our quarterly dividend."

Second quarter 2018 results

The Company reported second quarter 2018 revenue of $1.2 billion, an increase of 4% from the prior year period. Adjusted for currency exchange and certain aftermarket original equipment service revenue retained by the former parent, revenue increased by 1% in the second quarter. This reflects consistent revenue in Powertrain Systems and a decrease of 1% in Delphi Technologies Aftermarket. On a regional basis, it also reflects growth of 4% in North America, 2% in Europe, 6% in South America and a decrease of 4% in Asia.

The Company reported second quarter 2018 U.S. GAAP net income of $86 million and net income of $0.97 per diluted share, compared to $48 million and $0.54 per diluted share in the prior year period. Second quarter Adjusted Net Income, a non-GAAP financial measure defined below, totaled $115 million, or $1.29 per diluted share, which compares to Adjusted Net Income in the prior year period of $120 million, or $1.35 per diluted share. The decline in Adjusted Net Income per Share was primarily due to interest expense related to the issuance of debt in 2017 and, to a lessor degree, spin-related costs associated with becoming a stand-alone public company.

Second quarter U.S. GAAP operating income was $122 million, compared to $79 million in the prior year period. Adjusted Operating Income, a non-GAAP financial measure defined below, was $156 million, compared to $164 million in the prior year period. Adjusted Operating Income margin in the second quarter of 2018 was 12.7%, compared to 13.8% in the prior year period. The decline in Adjusted Operating Income was primarily due to spin-related costs associated with becoming a stand-alone public company. Depreciation and amortization expense (including asset impairment charges) totaled $48 million in the second quarter as compared to $49 million in the prior year period.

Interest expense for the second quarter totaled $19 million, as compared to no interest expense the prior year period, which reflects the interest related to the issuance of $1,550 million of debt during 2017 in connection with the separation.

U.S. GAAP tax expense in the second quarter of 2018 was $20 million, resulting in an effective tax rate of approximately 19%, compared to $22 million, or an effective rate of 28%, in the prior year period. The decrease in the effective tax rate reflects the impacts of favorable changes in geographic income mix.

The Company generated net cash flow from operating activities of $164 million in the second quarter, compared to $160 million in the prior year period. Capital expenditures totaled $57 million in the second quarter, compared to $31 million in the prior year period. The increased spending is primarily due to investments to support long-term growth in key technologies.

Year-to-date 2018 results

For the six months ended June 30, 2018, the Company reported revenue of $2.5 billion an increase of 7% from the prior year period. Adjusted for currency exchange and certain aftermarket original equipment service revenue retained by the former parent, revenue increased by 3% during the period. This reflects growth of 2% in Powertrain Systems and consistent revenue in Delphi Technologies Aftermarket. On a regional basis, it also reflects growth of 5% in North America, 4% in Asia, 1% in Europe and 6% in South America.

For the 2018 year-to-date period, the Company reported 2018 U.S. GAAP net income of $184 million and net income of $2.07 per diluted share, compared to $151 million and $1.70 per diluted share in the prior year period. Year-to-date Adjusted Net Income, a non-GAAP financial measure defined below, totaled $231 million, or $2.60 per diluted share, which compares to Adjusted Net Income in the prior year period of $236 million, or $2.66 per diluted share. The decline in Adjusted Net Income per Share was primarily due to interest expense related to the issuance of debt in 2017 and, to a lessor degree, spin-related costs associated with becoming a stand-alone public company.

The Company reported U.S. GAAP operating income of $260 million for the six months ended June 30, 2018, compared to $227 million in the prior year period. Adjusted Operating Income, a non-GAAP financial measure defined below, was $315 million for the six months ended June 30, 2018, compared to $326 million in the prior year period. Adjusted Operating Income margin was 12.5% for the six months ended June 30, 2018, compared to 13.8% in the prior year period. The decline in Adjusted Operating Income was primarily due to spin-related costs associated with becoming a stand-alone public company and, to a lesser degree, the absence of a commercial settlement that benefited the first quarter of 2017. Depreciation and amortization expense (including asset impairment charges) totaled $98 million as compared to $97 million in the prior year period.

Interest expense for the six months ended June 30, 2018 totaled $39 million, as compared to $1 million in the prior year period, which reflects the interest related to the issuance of $1,550 million of debt during 2017 in connection with the separation.

U.S. GAAP tax expense for the six months ended June 30, 2018 was $42 million, resulting in an effective tax rate of approximately 18%, compared to $53 million, or an effective rate of 24%, in the prior year period. The decrease in the effective tax rate reflects the impacts of favorable changes in geographic income mix and a decrease in net discrete tax expense.

The Company generated net cash flow from operating activities of $239 million in the six months ended June 30, 2018, compared to $176 million in the prior year period, which reflects improvement in net working capital, partially offset by cash paid for restructuring activities. Capital expenditures totaled $123 million during the six months ended June 30, 2018, compared to $82 million in the prior year period. The increased spending is primarily due to investments to support long-term growth in key technologies.

Share repurchase authorization

As part of the Company's balanced capital allocation strategy, the Board of Directors has approved a $100 million share repurchase authorization, while maintaining the quarterly dividend. The timing and amount of any share repurchases will be based on market conditions, share price and other factors. Repurchases may be made in the open market or in privately negotiated transactions. Repurchases under this authorization will be funded from one or a combination of existing cash balances and future free cash flow. The repurchase authorization has no time limit, does not obligate the Company to make any repurchases and may be suspended for periods or discontinued at any time.

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

Revised full year 2018 outlook

The Company's full year 2018 financial guidance is as follows:

(in millions, except per share amounts)

Full Year 2018

Revenue

$5,000 - $5,100

Adjusted operating income margin

12.1% - 12.3%

Adjusted earnings per share

$4.65 - $4.85

Cash flow from operations

$440 - $480

Capital expenditures

$290 - $310

Adjusted effective tax rate

16% - 17%

Key non-GAAP reconciliation items to the projected 2018 adjusted diluted earnings per share are as follows:

Earnings Per Share

Estimated separation charges

$0.84 - $0.89

Estimated charges for restructuring

$0.75 - $0.80

Original source: https://www.delphi.com/newsroom/press-release/delphi-technologies-reports-second-quarter-2018-financial-results-updates