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Delphi Automotive (DLPH) Q3 Earnings Beat Estimates, Up Y/Y

Zacks Equity Research
Updated

Delphi Automotive PLC DLPH posted $1.66 per share of adjusted earnings in the third quarter of 2017, up from $1.5 earned in the prior-year quarter. The bottom line surpassed the Zacks Consensus Estimate of $1.56.

Adjusted net income increased to $443 million from $409 million a year ago. This figure includes the advantageous impact of reduced share count and lower tax rate.

Revenues were $4.33 billion and surpassed the Zacks Consensus Estimate of $4.09 billion.

Delphi Automotive PLC Price, Consensus and EPS Surprise

Delphi Automotive PLC Price, Consensus and EPS Surprise | Delphi Automotive PLC Quote

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The top line increased 6% year over year, excluding the impact of currency exchange, commodity movements and divestitures. This upside was led by improved performances across South America (25%), Europe (6%) and Asia (19%), partly offset by a decline of 8% in North America.

Adjusted operating income rose to $566 million from $534 million in the third quarter of 2016. Adjusted operating margin was 13.1%, consistent with the year-ago quarter. This reflects sales growth of the company as well as the positive impact of its cost-reduction initiatives. However, growth-oriented investments and Mechatronics divestiture partly offset this upside.

Segment Details

In the Electrical/Electronic Architecture segment, revenues inched up 1% to $2.3 billion in the reported quarter. Also, adjusted operating income gained 6% to $336 million.

In the Powertrain Systems segment, revenues rose 12% to $1.2 billion. Adjusted operating income rallied 23% to $150 million.

The Electronics and Safety segment’s revenues increased 11% to $845 million. However, adjusted operating income declined 16% to $80 million.

Share Repurchases

In third-quarter 2017, Delphi Automotive repurchased 1.02 million shares for approximately $95 million. Following this, the company had approximately $989 million available for future repurchases under its current share buyback program.

Financial Position

As of Sep 30, 2017, Delphi Automotive had cash and cash equivalents of $557 million compared with $838 million as of Dec 31, 2016. Total long-term debt increased to $4.9 billion as of Sep 30, 2017 compared with $4 billion as of Dec 31, 2016.

At the end of nine months of fiscal 2017, operating cash flow decreased to $1.1 billion from $1.3 billion during the same period in 2016. Again in the same time frame, capital expenditure totaled $591 million compared with $614 million a year ago.

Outlook

For 2017, Delphi Automotive increased its revenue expectation to $17.35-$17.45 billion compared with the previous expectation of $16.85-$17.05 billion. Adjusted earnings per share are expected in the range of $6.7-$6.8 compared with the previous guidance of $6.55-$6.75.

Zacks Rank & Key Picks

Delphi Automotive currently carries a Zacks Rank #3 (Hold).

Some better-ranked companies in the auto space include Daimler AG DDAIF, Cummins Inc. CMI and Ford Motor Company F. All stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Daimler has an expected long-term growth rate of 2.8%.

Cummins has an expected long-term growth rate of 12.4%.

Ford has an expected long-term growth rate of 10.7%.

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Ford Motor Company (F) : Free Stock Analysis Report
 
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