From Detroit Free Press
TROY, MI — Auto-parts maker Delphi Corp. said Tuesday its fourth-quarter net earnings sank to $82 million as it paid for a major restructuring program it launched in October, which included 8,500 job cuts.
Net income for the quarter was 15 cents a share, down from $119 million, or 21 cents, in the same period a year earlier.
Excluding restructuring charges of $46 million, Troy-based Delphi earned $128 million, or 23 cents a share. The results beat Wall Street analysts’ consensus estimate of 21 cents a share.
The company’s fourth-quarter sales were $7.26 billion, up about 4 percent from $6.97 billion in the same period a year earlier.
Delphi CEO J.T. Battenberg III said during a conference call that Delphi’s performance was strong despite the restructuring and other hurdles last year.
“It was a performance that came in spite of many issues facing the industry and the economy,” he said.
Battenberg said the company’s strategy is to produce more cash from business with companies other than its former owner, General Motors Corp. Non-GM revenue rose to $3.02 billion in 2003 from $2.49 billion in 2002. Operating cash flow rose 21 percent for the quarter and fell about 3 percent for the year.
Other highlights for 2003 were a 50-percent increase in business with China and the continued growth of satellite radio. Delphi said it sold 1.8 million receivers in 2003, including its portable XM SKYFi units.
For all of 2003, Delphi reported a loss of $56 million, or 10 cents a share, down from a profit of $342 million, or 61 cents a share, in 2002. Last year’s results include $402 million in after-tax restructuring charges.
Delphi reported sales in 2003 of $28.1 billion, up from $27.4 billion in 2002.
Though the restructuring lowered results, company executives said Tuesday the belt-tightening program is ahead of schedule and the company will likely reap the benefits this year.
In 2003, the supplier cut 3,650 workers and by the end of the year the company expects to complete its restructuring, which calls for 8,500 job cuts globally. Many of the cuts will come from attrition and employees leaving Delphi to work for GM.
For the first quarter of 2004, the company expects to earn between $30 million and $80 million, after restructuring costs of $45 million to $65 million. Last month, the company said it expects to earn between $400 million and $500 million for the full year 2004, or 71 cents to 89 cents a share. That excludes about $120 million to relocate UAW members to GM.
One analyst said Delphi’s report was just as he expected.
“There were no big surprises in the fourth quarter of 2003,” said Merrill Lynch auto analyst John Casesa.
Delphi shares closed at $11.50, down 10 cents, on the New York Stock Exchange.
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