Delphi Automotive Systems
(NYSE: Dph) today reported third quarter 2000 consolidated earnings of $148
million, or $0.26 earnings per share, in line with analyst consensus estimates.
This represents a 9 percent increase in earnings over the same period last year.
“We continue to see
improved margins in our operations as we aggressively manage our portfolio,
exiting more than $125 million of low-margin business in the third quarter,”
said Alan S. Dawes, Delphi Chief Financial Officer. “Additionally, Delphi
Manufacturing System implementation continues to generate results as we utilize
lean practices and improve capital efficiency at our manufacturing facilities
Sales to customers other
than General Motors rose to $2.0 billion, or 30 percent of total sales, representing
a 15 percent increase over the third quarter of 1999 on a comparable basis.
Net income margin reached 2.2 percent, up from 2.0 percent for the same period
last year. Gross and operating margins also increased. Quarterly net sales were
$6.6 billion, down 2 percent from the same period last year. Dawes attributed
the sales reduction to exited businesses, price reductions, foreign currency
fluctuations and a slight softening of new vehicle and aftermarket demand in
North America and Europe.
results mark the seventh consecutive quarter since our IPO that we have achieved
solid financial performance,” said J.T. Battenberg III, Delphi chairman,
chief executive officer and president. “We continue to deliver on the targets
established at our independence to produce long-term value for our shareholders.
We remain focused on targets of 5 percent net income margin by the end of 2002,
year-over-year non-GM sales growth of more than 10 percent and return on net
assets of 12.5 percent, while generating operating cash flow of $1.5-2.0 billion
Aggressive Growth Initiatives
Growth in Delphi’s Mobile
MultiMedia (MMM) product line continued strong with $114 million in sales in
the third quarter, representing a 777 percent increase over the third quarter
of 1999, and a 97 percent increase over second quarter 2000 results. The previous
target for 2000 MMM sales was estimated at $200 million, but based on higher
than expected sales year-to-date, Delphi now anticipates the total could approach
technologies continue to generate new business bookings. Major contracts* announced
during the quarter include:
* Renault chose Delphi to
provide advanced climate control technology for all versions of its next-generation
Laguna model, expected to go on sale in Europe by early 2001. The expected lifetime
value of the contract is more than $550 million.
* Jaguar selected Delphi’s
Passive Occupant Detection System (PODS), the first and only weight-sensing
system of its kind to reach the market. This technology will be standard equipment
on the 2001 Jaguar XK sports car series.
* Delphi won a contract
to supply significant electrical wiring content to Volvo Truck Corporation in
Europe. The programs include commercial trucks of 16 tons and greater, and have
expected annual volumes in excess of 40,000 units.
* Volkswagen do Brasil selected
Delphi to provide its Compact Variable Compressor for the VW Gol. The expected
lifetime value of the contract is worth more than $40 million when full production
is reached in 2002.
* Delphi will supply its
E-STEER(TM) Electric Power Steering System to Volkswagen for its Lupo 3L TDI
model, arriving in Europe this autumn.
Delphi announced the formation
of a majority-owned joint venture with Ashimori Industry Co., Ltd. to jointly
pursue seat belt business growth. The venture will focus on new and existing
opportunities in the North American, South American and European seat belt systems
Multi-national Delphi Automotive
Systems, with headquarters in Troy, Mich., USA, Paris, Tokyo and Sao Paulo,
Brazil, is a world leader in mobile electronics and transportation components
and systems technology. Delphi’s three business sectors — Dynamics & Propulsion;
Safety, Thermal & Electrical Architecture; and Electronics & Mobile
Communication — provide comprehensive product solutions to complex customer
needs. Delphi has approximately 216,000 employees and operates 184 wholly owned
manufacturing sites, 44 joint ventures, 53 customer centers and sales offices
and 31 technical centers in 40 countries. Delphi can be found on the Internet
at www.delphiauto.com .