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Delphi Technologies Reports 3rd Quarter 2018 Financial Results 

Strong momentum in key technologies continues with $3.8 billion of bookings in the third quarter, the company says.

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Delphi Technologies PLC has reported third quarter 2018 U.S. GAAP earnings of 44 cents per diluted share. Excluding special items, third quarter earnings totaled 72 cents per diluted share. The company also reported revenue of $1.2 billion for the quarter and $3.7 billion for the year-to-date period, a decrease of 1 percent and an increase of 2 percent compared to the respective equivalent prior period, on an adjusted basis.

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“While we face a more challenging external environment, particularly in China, we delivered above-market revenue growth in Q3 and remain in a strong position to unlock long-term value,” said Hari Nair, interim CEO of Delphi Technologies. “Our confidence is driven by an acceleration in momentum in key areas of our portfolio, which strengthens our future prospects. For example, our industry-leading Power Electronics technology has seen adjusted revenue growth of approximately 50 percent in 2018. Moreover, with a record $9 billion of lifetime bookings in the first three quarters of the year, we have already exceeded our internal target for 2018, and we continue to make significant investments to support this growth. While we expect certain transitional headwinds to continue into 2019, we will further prioritize our investments in our industry-leading technologies on the path to electrification, and ultimately drive stronger long-term growth.”

The company reported third quarter 2018 revenue of $1.2 billion, a decrease of 4 percent from the prior year period. Adjusted for currency exchange and certain aftermarket original equipment service revenue retained by the former parent, revenue decreased by 1 percent in the third quarter. Adjusted revenue reflects a decrease of 2 percent in Powertrain Systems and a decrease of 1 percent in Delphi Technologies Aftermarket. On a regional basis, adjusted revenue also reflects growth of 5 percent in Europe, 3 percent in North America, 15 percent in South America and a decrease of 13 percent in Asia.

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The company reported third quarter 2018 U.S. GAAP net income of $39 million and net income of 44 cents per diluted share, compared to $78 million and 88 cents per diluted share in the prior year period. Third quarter Adjusted Net Income totaled $64 million, or 72 cents per diluted share, which compares to Adjusted Net Income in the prior year period of $111 million, or $1.25 per diluted share. The company says this decrease in Adjusted Net Income per Share was primarily due to unfavorable product mix, interest expense related to the issuance of debt in 2017 and, to a lesser degree, spin-related costs associated with becoming a stand-alone public company.

Third quarter U.S. GAAP operating income was $81 million, compared to $113 million in the prior year period. Adjusted Operating Income, a non-GAAP financial measure defined below, was $108 million, compared to $147 million in the prior year period. Adjusted Operating Income margin in the third quarter of 2018 was 9.3%, compared to 12.2% in the prior year period. The decrease in Adjusted Operating Income was primarily related to an unfavorable product mix and, to a lesser degree, spin-related costs associated with becoming a stand-alone public company. Depreciation and amortization expense (including asset impairment charges) totaled $47 million in the third quarter as compared to $47 million in the prior year period.

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Year-to-date 2018 results

For the nine months ended Sept. 30, the company reported revenue of $3.7 billion, an increase of 4 percent from the prior year period. Adjusted for currency exchange and certain aftermarket original equipment service revenue retained by the former parent, revenue increased by 2 percent during the period.

For the 2018 year-to-date period, the company reported 2018 U.S. GAAP net income of $223 million and net income of $2.51 per diluted share, compared to $229 million and $2.58 per diluted share in the prior year period. Year-to-date Adjusted Net Income totaled $295 million, or $3.32 per diluted share, which compares to Adjusted Net Income in the prior year period of $347 million, or $3.92 per diluted share. The decrease in Adjusted Net Income per Share was primarily due to unfavorable product mix, interest expense related to the issuance of debt in 2017 and, to a lesser degree, spin-related costs associated with becoming a stand-alone public company.

The company reported U.S. GAAP operating income of $341 million for the nine months ended Sept. 30, compared to $340 million in the prior year period. Adjusted Operating Income was $423 million for the nine months ended Sept. 30, 2018, compared to $473 million in the prior year period. Adjusted Operating Income margin was 11.5 percent for the nine months ended September 30, 2018, compared to 13.3 percent in the prior year period. The decrease in Adjusted Operating Income was mainly due to an unfavorable product mix, spin-related costs associated with becoming a stand-alone public company, and the absence of a commercial settlement that benefited the first quarter of 2017. Depreciation and amortization expense (including asset impairment charges) totaled $145 million as compared to $144 million in the prior year period.

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Full year 2018 outlook

In line with its October 5th update, the company has maintained its full year outlook for 2018 as it relates to Adjusted revenue growth and Adjusted Operating Income margin. Revenue is expected to be in the range of $4.85 billion to $4.90 billion. Adjusted Operating Income margin is expected to be in the range of 11.3 to 11.5 percent. Adjusted earnings per share is now expected to be in the range of $4.20 to $4.30.

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