GILLINGHAM, England – Delphi Automotive PLC has reported first quarter 2015 U.S. GAAP earnings from continuing operations of 99 cents per diluted share. Excluding special items, first quarter earnings from continuing operations increased 4 percent to $1.21 per diluted share.
“Delphi’s strong financial results demonstrate that the disciplined execution of our strategy is resulting in solid operating growth,” said Kevin Clark, president and CEO. “Additionally, the sale of our Thermal Division has unlocked value for our shareholders and will help fuel a focused, high-growth product portfolio that capitalizes on industry trends in safe, green and connected content going forward.”
The company reported first quarter 2015 revenue of $3.8 billion, a decline of 3 percent from the prior year period, reflecting unfavorable currency impacts, which offset continued volume growth in Asia and North America. Adjusted for the impacts of currency exchange and commodity movements, revenue increased by 6 percent in the first quarter. This reflects growth of 15 percent in Asia, 7 percent in North America and 2 percent in Europe, partially offset by a decline of 16 percent in South America.
First quarter net income from continuing operations excluding restructuring and other special items (adjusted net income), totaled $353 million, or $1.21 per diluted share, which includes the favorable impacts of a reduced share count. Adjusted net income in the prior year period was $357 million, or $1.16 per diluted share.
Discontinued Operations – Sale of Thermal Business
As previously disclosed, during the first quarter of 2015 Delphi entered into a definitive agreement to sell its wholly owned Thermal Systems business to MAHLE GmbH for approximately $727 million, subject to closing adjustments. The sale is expected to close in the third quarter of 2015, subject to regulatory and other approvals, and Delphi expects to receive proceeds of approximately $670 million and to recognize a gain on the divestiture of more than $300 million. Proceeds from the sale will be used to fund future growth initiatives, including acquisitions, as well as share repurchases under the existing share repurchase program. Delphi and MAHLE also signed a separate letter of intent to sell Delphi’s interest in Shanghai Delphi Automotive Air-Conditioning System Co. Ltd. (SDAAC), subject to regulatory and other approvals. Proceeds from the sale of Delphi’s interest in SDAAC will be in addition to the $727 million paid for the wholly owned Thermal operations. In addition, as part of the company’s overall Thermal Systems divestiture strategy, Delphi intends to divest its interest in Korea Delphi Automotive Systems Corp. (KDAC) joint venture to a separate buyer.
The results of the Thermal Systems business, including the company’s interests in SDAAC and KDAC, are presented as discontinued operations separate from the company’s continuing operations for all periods presented. Loss from discontinued operations attributable to Delphi, net of tax, was $79 million for the three months ended March 31, 2015, which includes an $88 million non-cash impairment loss related to the company’s interest in KDAC.
