Automotive parts supplier Delphi Corp. on Friday posted higher second-quarter earnings, but reportedly warned it could report a loss in the third quarter due to production cuts by major automakers.

According to Reuters, the Troy, Michigan-based company said net profit rose to $US131 million, or 23 cents per share, from $88 million, or 16 cents per share, a year earlier, boosted by stronger sales to customers other than former parent General Motors.

Delphi, however, said it expected a third-quarter net loss of $10 million to $40 million, on revenue of between $6.4 billion to $6.8 billion, near the company’s break-even point, the report noted.

Excluding up to $20 million of after-tax restructuring charges, Delphi expects to report third-quarter results ranging between a loss of $20 million to a profit of $10 million, Reuters said.

Analysts had been expecting the company to post a profit of between 3 cents and 17 cents per share, with an average forecast for a profit of 7 cents per share, according to Reuters Research.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

After GM and Ford reported a surprising double-digit drop in June US vehicle sales, some analysts told the news agency that the automakers might have to cut production to reduce inventories of unsold vehicles, while others said that June’s weak US vehicle sales, which fell to the lowest rate in nearly six years, may push the car companies to first try cutting inventories with higher sales incentives.

Reuters said Delphi’s second-quarter results included a tax gain of $12 million and an after-tax restructuring charge of $37 million, part of the costs of plans announced last fall to cut its worldwide work force by 8,500 jobs, or nearly 5%.

Excluding those one-time items, Delphi’s profit for the second quarter was $156 million, or 28 cents per share, in line with Wall Street and the company’s estimates, the report said, adding that Delphi in April forecast a second quarter profit between $145 million to $165 million, excluding one-time items.

Analysts had expected Delphi to report second quarter earnings of between 24 cents and 30 cents per share, with an average estimate of 28 cents per share, according to Reuters Research.