Delphi said second quarter earnings per share increased 15% year on year to US$1.01. Year to date EPS increased 78% to $2.05.

Reuters noted that analysts had expected earnings of 91 cents per share.

The Tier One supplier booked record second quarter EBITDA and EBITDA margin of $581m and 14.5%, compared with $544m and 12.9% in Q2 2011. Year to date EBITDA and EBITDA margin of $1.2bn and 14.3%, compared with $1.1bn and 13.1% for the first six months of 2011.

Delphi confirmed full year 2012 EBITDA guidance of $2.175bn to $2.250bn, representing improved margin outlook, and increased full year 2012 earnings per share guidance to $3.68 to $3.91.

Record second quarter 2012 revenues slipped 5.1% year on year to $4bn, the result of significant weakening of the euro and Brazilian real, according to Delphi.

Second quarter net income of $330m and diluted earnings per share of $1.01 compared to $298m and $0.88 the previous year.

"Delphi's solid second quarter financial results reflect the balance of our geographic diversity and the benefits of our lean and flexible cost structure," said CEO and president Rodney O'Neal. "We remain confident that even in this challenging macro-environment, we are well positioned to generate significant cash flow and increase profitability."

In a note to investors cited by Reuters, JPMorgan said the company's margin gains are "years ahead of schedule," noting Delphi previously had targeted a pre-tax margin of 15% by 2015.

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Delphi Reports Second Quarter 2012 Financial Results

Second quarter diluted earnings per share increased 15% to $1.01 from $0.88 in Q2 2011; Year-to-date diluted earnings per share increased 78% to $2.05 from $1.15 in the prior year

Record second quarter EBITDA and EBITDA margin of $581 million and 14.5%, compared with $544 million and 12.9% in Q2 2011; Year-to-date EBITDA and EBITDA margin of $1.2 billion and 14.3%, compared with $1.1 billion and 13.1% for the first six months of 2011

Reaffirms full year 2012 EBITDA guidance of $2.175 billion to $2.250 billion, representing improved margin outlook; increases full year 2012 earnings per share guidance to $3.68 to $3.91

Release Date: July 31, 2012

Download the press release with all charts as a PDF here.

GILLINGHAM, England / TROY, Mich. — Delphi Automotive (NYSE: DLPH), a leading global vehicle components manufacturer providing electrical and electronic, powertrain, safety and thermal technology solutions to the global automotive and commercial vehicle markets, today reported second quarter 2012 revenues of $4.0 billion, a decrease of 5.1% from the prior year period, the result of significant weakening of the Euro and Brazilian Real. Adjusted for the impacts of currency exchange, commodity movements and divestitures, revenue increased 1.3% in the second quarter. The Company reported second quarter net income of $330 million and diluted earnings per share of $1.01, compared to $298 million and $0.88 per diluted share in the prior year period.

"Delphi's solid second quarter financial results reflect the balance of our geographic diversity and the benefits of our lean and flexible cost structure," said Rodney O'Neal, chief executive officer and president. "We remain confident that even in this challenging macro-environment, we are well positioned to generate significant cash flow and increase profitability."

Second Quarter 2012 Results
The Company reported second quarter 2012 revenue of $4.0 billion, an increase of 1.3% over the second quarter of 2011, adjusting for currency exchange, commodity movements and divestitures. The increase in adjusted revenue reflects growth of 10% in Asia and 7% in North America, partially offset by a 3% decline in Europe and a 13% decline in South America.

Second quarter net income totaled $330 million, or $1.01 per diluted share, compared to net income of $298 million, or $0.88 per diluted share, in the prior year period (refer to footnote 2 for determination of weighted average shares outstanding and earnings per share calculations).

Second quarter earnings before depreciation and amortization, interest expense, other income (expense), income tax expense, and equity income ("EBITDA") was $581 million, compared to $544 million in the prior year period, an increase of 6.8%. EBITDA margin was 14.5% in the second quarter of 2012, compared to 12.9% in the prior year period. The improvement in EBITDA reflects strong performance in the Electrical/Electronic Architecture, Powertrain, and Electronics and Safety segments, partially offset by the unfavorable impacts of currency exchange and lower earnings in our Thermal segment.

Interest expense for the second quarter totaled $33 million, compared to $41 million in the prior year period, reflecting lower debt levels.

Tax expense for the second quarter was $98 million, representing an effective tax rate of approximately 22%, compared to $73 million, or an effective tax rate of 19%, in the prior year period.

The Company generated net cash flow from operating activities of $461 million in the second quarter, as compared to $343 million in the prior year period. Cash flow before financing totaled $335 million compared to $221 million in the prior year period.

Year-to-Date 2012 Results
For the six month period ended June 30, 2012, the Company reported revenue of $8.1 billion, an increase of 3.0% over the first six months of 2011, adjusting for currency exchange, commodity movements and divestitures. The increase in adjusted revenue reflects growth of 11% in Asia and 7% in North America, partially offset by flat revenue in Europe and a 12% decline in South America.

For the 2012 year-to-date period, net income totaled $672 million, or $2.05 per diluted share, compared to net income of $589 million in the prior year period (refer to footnote 2 for determination of weighted average shares outstanding and earnings per share calculations).

EBITDA for the first six months of 2012 totaled $1,159 million, compared to $1,073 million in the prior year period, an increase of 8.0%. EBITDA margin was 14.3% for year-to-date 2012, compared to 13.1% in the prior year period. The improvement in EBITDA reflects strong performance in the Electrical/Electronic Architecture and Powertrain segments, and the absence of non-recurring items incurred in the prior year period. Partially offsetting these improvements were lower earnings in our Thermal business segment, the unfavorable impacts of currency exchange, and $32 million of increased expense resulting from the variable accounting impacts related to the Company's 2010 Long-Term Incentive Plan.

Interest expense for the first six months of 2012 totaled $68 million, compared to $47 million in the prior year period, reflecting the debt financing incurred at the end of the first quarter of 2011 to redeem the ownership interests previously held by General Motors Company and the Pension Benefit Guaranty Corporation.

Tax expense for year-to-date 2012 was $175 million, resulting in an effective tax rate of approximately 20%, compared to $189 million, or an effective rate of 24%, in the prior year period. The improvement in 2012 primarily reflects the impacts of the geographic mix of pretax earnings, tax planning initiatives, and the reduction of withholding taxes.

In the first six months of 2012, the Company generated net cash flow from operating activities of $754 million, as compared to $499 million in the prior year period. Cash flow before financing totaled $388 million compared to $260 million in the prior year period.

As of June 30, 2012, the Company had cash and cash equivalents of $1.5 billion and access to $1.3 billion in undrawn committed bank facilities, providing the Company with $2.8 billion of total liquidity. Total debt outstanding as of June 30, 2012 was $2.1 billion.

Credit Ratings Update
On July 23, 2012, Fitch initiated coverage of the Company with an investment grade corporate credit rating of BBB-.

Share Repurchase Program
During the second quarter of 2012, Delphi repurchased approximately $150 million, or 5.3 million of its outstanding shares under the previously announced share repurchase program. The program will terminate on the earlier to occur of December 31, 2012 or when the Company attains $300 million in ordinary share repurchases.

Acquisition Activity
As previously announced, Delphi made a binding offer and has subsequently executed an agreement to acquire FCI Group's Motorized Vehicles Division. Completion of the transaction remains subject to customary regulatory approvals, and is expected to occur sometime in the fourth quarter.

Q3 2012 and Full Year 2012 Outlook
The Company's Q3 2012 and full year financial guidance reflects a significant strengthening of the U.S. dollar, which negatively impacts year over year comparisons, as well as revised OEM production schedules. The Company's updated Q3 and full year financial guidance reflects an estimated average exchange rate of $1.22 per Euro for Q3 and $1.26 per Euro for the full year, as compared to the average exchange rate for Q3 2011 and full year 2011 of $1.41 per Euro and $1.39 per Euro, respectively.

(dollars in millions)Q3 2012Previous
Full Year 2012
Current
Full Year 2012
Earnings Per Share $0.65 - $0.80 $3.63 - $3.85 $3.68 - $3.91
EBITDA $450 - $500 $2,175 - $2,250 $2,175 - $2,250
EBITDA Margin 12.3% - 13.3% 13.4% - 13.6% 13.9% - 14.1%
Revenue $3,650 - $3,750 $16,200 - $16,500 $15,600 - $15,900

Full year cash flow before financing is expected to be approximately $1.0 billion. The Company estimates a full year tax rate of approximately 19%. Quarterly tax rates can be affected by the geographic mix of pretax earnings as well as the timing of discrete tax items. The third quarter effective tax rate is estimated to be approximately 25% resulting from the geographic mix of pretax earnings and the anticipated timing of discrete tax events.

 

 

Original source: http://delphi.com/news/pressReleases/pr_2012_07_31_001/