Delphi Technologies PLC has announced financial results for its fourth quarter and full year 2019.

• Revenue of $1.1 billion decreased 10% percent from the year-ago quarter. Adjusting for currency exchange, revenue decreased 8%. The decline was primarily due to lower global production, particularly in North America and Europe, the downward trend in passenger car diesel fuel injection systems in Europe, and the closure of certain customer production sites in North America. This was partially offset by an increase in sales of passenger car gasoline fuel injection systems in China. 

• On a regional basis, quarterly adjusted revenue reflects decreases of 13% in Europe, 18% in North America, and 17% in South America, partially offset by an increase of 14% in Asia Pacific. 

• Operating loss was $15 million, compared to operating income of $93 million in the year-ago quarter. Adjusted operating income was $75 million, compared to $125 million in the prior year period. The year-on-year decline in adjusted operating income was primarily due to unfavorable product mix, most notably between higher margin passenger car diesel fuel injection systems, and lower margin advanced gasoline direct injection fuel systems. In addition, the decline was also impacted by lower volumes, partially offset by the benefits of announced restructuring initiatives. 

• Earnings per diluted share of (46 cents) represents a 130% decline from the year-ago quarter. Excluding special items, earnings per diluted share was 62 cents, compared to $1.06 in the year-ago quarter. 

• Cash flow from operating activities was $142 million, compared to $126 million in the prior year period. The year-on-year increase is primarily due to an improvement in working capital, offset by the decrease in net income, excluding the impact of non-cash items.

Full year 2019

• Revenue of $4.4 billion decreased 10% percent from the prior year period. Adjusting for currency exchange, revenue decreased 7%. The decline was primarily due to lower global production, particularly in China, the downward trend in passenger car diesel fuel injection systems in Europe, and the closure of certain customer production sites in North America. 

• On a regional basis, year-on-year adjusted revenue reflects decreases of 10% in North America, 9% in Asia Pacific, 4% in Europe and 4% in South America. 

• Operating income was $141 million, compared to $434 million in the prior year period. Adjusted operating income was $314 million, compared to $548 million in the prior year period. The year-on-year decline in adjusted operating income was primarily due to unfavorable product mix, most notably between higher margin passenger car diesel fuel injection systems, and lower margin advanced gasoline direct injection fuel systems, as well as lower revenues. In addition, the decline was also impacted by lower volumes, partially offset by the benefits of announced restructuring initiatives. 

• Earnings per diluted share of $0.19 represents a 95% decline from the prior year period. Excluding special items, earnings per diluted share was $2.43, compared to $4.38 in the prior year period. 

• Cash flow from operating activities was $292 million, compared to $419 million in the prior year period. The year-on-year decrease is primarily due to the decrease in net income, excluding the impact of non-cash items, partially offset by an improvement in working capital.

CEO Comments

“We ended 2019 with improved momentum, exceeding our revenue, adjusted EPS and cash flow targets for the fourth quarter. While our performance throughout the year was impacted by ongoing industry and macro headwinds, we have made strong progress in a number of operational areas. During Q4, we began implementing our cost transformation plan, which will realign and reshape Delphi Technologies for future profitable growth. I am pleased with our early progress and are ahead of schedule in delivering bottom line savings,” said Richard Dauch, CEO of Delphi Technologies.

“At the end of January, we were pleased to announce that BorgWarner will acquire Delphi Technologies in an all-stock transaction. Together, we plan to create a pioneering propulsion technologies company uniquely equipped to serve OEMs and aftermarket customers around the world. This compelling transaction, which is expected to be completed in the second half of the year, was unanimously approved by our board of directors and delivers clear benefits to our stakeholders. For our shareholders, they receive immediate value and the ability to benefit from the future upside potential given the enhanced prospects of the combined company.”