Delphi Automotive PLC has reported second quarter 2015 U.S. GAAP earnings from continuing operations of $1.21 per diluted share. Excluding special items, second quarter earnings from continuing operations totaled $1.34 per diluted share.
“Delphi’s strong financial results and record second quarter margins are the result of another quarter of outstanding operating performance and the continued execution of our strategy to generate growth,” said Kevin Clark, president and CEO. “We also successfully completed the sale of our wholly owned thermal systems business in the quarter, further allowing Delphi to strategically focus on a high-growth portfolio that capitalizes on industry trends in safe, green and connected vehicles.
The company reported second quarter 2015 revenue of $3.9 billion, a decline of 5 percent from the prior year period, reflecting unfavorable currency impacts, which offset continued volume growth, principally in Asia and North America. Adjusted for the impacts of currency exchange and commodity movements, revenue increased by 4 percent in the second quarter. This reflects growth of 8 percent in Asia, 5 percent in North America and 4 percent in Europe, partially offset by a decline of 15 percent in South America.
The company reported second quarter 2015 U.S. GAAP net income from continuing operations of $350 million and earnings from continuing operations of $1.21 per diluted share, compared to $360 million and $1.19 per diluted share in the prior year period. Second quarter net income from continuing operations excluding restructuring and other special items (adjusted net income), totaled $386 million, or $1.34 per diluted share, which includes the favorable impacts of a reduced share count. Adjusted net income in the prior year period was $409 million, or $1.35 per diluted share.
Year-to-Date 2015 Results
For the six months ended June 30, the company reported revenue of $7.7 billion, a decline of 4 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 5 percent during the period. This reflects growth of 12 percent in Asia, 6 percent in North America and 3 percent in Europe, partially offset by a decline of 15 percent in South America.
For the 2015 year-to-date period, the company reported U.S. GAAP net income from continuing operations of $638 million and earnings from continuing operations of $2.20 per diluted share, compared to $670 million and $2.19 per diluted share in the prior year period. Year-to-date Adjusted net income totaled $739 million, or $2.55 per diluted share, which includes the favorable impacts of a reduced share count. Adjusted net income in the prior year period was $766 million, or $2.51 per diluted share.
Discontinued Operations – Sale of Thermal Business
As previously disclosed, on June 30, Delphi closed the sale of its wholly owned Thermal Systems business to MAHLE GmbH. The company received net cash proceeds of approximately $660 million and recognized an after-tax gain on the divestiture of $285 million within income from discontinued operations. Proceeds from the sale will be used to fund future growth initiatives, including acquisitions, as well as share repurchases. Delphi and MAHLE also have a separate letter of intent to sell Delphi’s interest in Shanghai Delphi Automotive Air-Conditioning System Co. Ltd. (SCAAC), subject to regulatory and other approvals, for proceeds in addition to those received for the wholly owned Thermal operations. In addition, as part of the company’s overall Thermal Systems divestiture strategy, Delphi intends to divest the company’s interest in its 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. Income from discontinued operations attributable to Delphi, net of tax, was $295 million for the three months ended June 30, including the $285 million after-tax gain on divestiture, and $216 million for the six months ended June 30, which also includes an $88 million non-cash impairment loss that was recorded in the first quarter of 2015 related to the company’s interest in KDAC.
