Delphi Automotive Exceeds Analysts' Expectations Despite Complicated Comparisons

Strategic Insights -

Delphi Automotive, the largest independent automotive parts supplier, has reported profits of $394m after-tax in the three months to end-June, narrowly beating Wall Street's consensus estimate of 68 cents in earnings per share. The result is a significant improvement from the previous year's strike-impacted profits, with sales standing at $7.7bn, up from $6.6bn in the same period last year. Delphi's non-GM customers saw a notable growth of 11.4 per cent year-on-year, ahead of the company's stated goal of a 10 per cent growth rate. The company has also reported a sharp increase in sales to its former parent, General Motors, up 18.4 per cent.

Key Takeaways:

  • Delphi Automotive reported profits of $394m after-tax in the three months to end-June, a significant improvement from the previous year's strike-impacted profits.
  • Sales to non-GM customers grew by 11.4 per cent year-on-year, ahead of Delphi's stated goal of a 10 per cent growth rate.
  • Sales to General Motors, Delphi's former parent, increased by 18.4 per cent.
  • The company has announced a share buy-back programme for up to 19m shares to pre-fund various employee incentive schemes.
  • Delphi will also pay a 7 cents a share dividend for the quarter.
  • The net profit margin in the latest period was 5.1 per cent.
  • The company reported a significant growth in sales, with booked business during the first half of the year reaching $15bn.

Statistics:

  • Profits: $394m after-tax in the three months to end-June.
  • Earnings per share: 69 cents, beating Wall Street's consensus estimate of 68 cents.
  • Sales to non-GM customers: $1.7bn, up from $1.52bn in the same period last year.
  • Sales to General Motors: $6.9bn, up 18.4 per cent from the previous year.
  • Sales: $7.7bn, a significant improvement from the previous year's strike-impacted $6.6bn.
  • Net profit margin: 5.1 per cent.
  • Booked business: $15bn during the first half of the year.

Sources:

  • Financial Times Limited 1999.