Delphi has reported net income for the fourth quarter of $55 million, or $0.10 per share. The results compare with earnings of $200 million, or 36 cents per share, a year earlier but are much in line with analysts’ expectations.

Delphi achieved fourth-quarter sales of $6.4 billion, down 8 percent from the same quarter of the previous year due to ‘softer year-over-year customer production levels and planned portfolio actions.’

Sales to non-GM customers (the company was spun off from GM in 1999) were $2.1 billion, or 33 percent, during the quarter.

Chief Financial Officer and Executive Vice President Alan S. Dawes said the company experienced stable, but lower, customer production schedules despite zero percent financing and other retail incentives offered by automakers during the quarter, as the automakers continued to sell out of their existing inventories.

For 2001 as a whole, Delphi’s sales were $26.1 billion, down $3 billion from 2000, as a result of softer customer production volumes, the elimination of non- performing and non-core businesses, and unfavourable currency exchange. The company earned $220 million in net income (excluding a $404 million after-tax restructuring charge in Q1 and a $186 million after-tax impairment charge in Q4).

Sales to customers other than General Motors were 32 percent of total sales, or $8.5 billion. GM remained Delphi’s largest customer in 2001 on sales of $17.6 billion.

During 2001, Delphi announced a restructuring plan to close nine plants, consolidate operations at more than 40 other facilities and reduce the global workforce by 11,500 positions. The company says that it is on track to complete these actions by the end of March 2002.

Delphi is forecasting Q1 2002 global sales of $6.6 to 6.7 billion, up slightly from $6.5 billion in Q1 2001, reflecting the level of customer production schedules offset by the impact of divestitures.

For Q1 2002, Delphi expects to earn net income of $110 to 130 million, improved from a loss of $25 million in Q1 2001, excluding special charges. That is largely based on higher production schedules from the OEMs and a favourable inventory cycle. GM – Delphi’s largest customer – is reportedly looking to raise production by 5% in Q1.

However, many analysts view Delphi’s Q1 earnings target as a little ambitious given the pricing pressures that the OEMs are applying to their suppliers.