Delphi Automotive reports 2012 Q1 revenues of $4.1 billion. The global vehicle components manufacturer supplies electrical and electronic, powertrain, safety and thermal technology solutions to commercial vehicle and global automotive markets. Delphi Automotive reports 2012 Q1 net income of $342 million.
Press Release: Delphi reports FIRST quarter 2012 financial results;raises full-year 2012 EPS GUIDANCE
- First quarter net income of $342 million compared with $291 million in Q1 2011
First quarter diluted earnings per share of $1.04 compared with $0.42 in Q1 2011
First quarter EBITDA and EBITDA margin of $578 million and 14.1%, compared with $529 million and 13.2% in Q1 2011
- First quarter revenue of $4.1 billion, up 2.4% over Q1 2011; up 4.7% adjusted for currency and commodity impacts
- Full year 2012 revenue guidance reaffirmed; earnings per share guidance raised to $3.63 to $3.85
Delphi Automotive (NYSE: DLPH), a leading global vehicle components manufacturer providing electrical and electronic, powertrain, safety and thermal technology solutions to the global automotive and commercial vehicle markets, today reported first quarter 2012 revenues of $4.1 billion, an increase of 2.4% over the prior year period. Adjusted for unfavorable currency and commodity impacts, revenue increased 4.7% in the first quarter. The Company reported first quarter net income of $342 million and diluted earnings per share of $1.04, compared to $291 million and $0.42 per diluted share in the prior year period.
“I’m really pleased with an outstanding first quarter. We achieved record EBITDA margins of 14.1 percent and above market growth,” said Rodney O’Neal, chief executive officer and president. “We have and will continue to build a robust pipeline of advanced technologies that will allow us to capitalize on our strengths in the safe, green and connected space.”
First Quarter 2012 Results
The Company reported first quarter 2012 revenue of $4.1 billion, an increase of 4.7% over the first quarter of 2011, adjusting for fluctuations in currency exchange rates and commodity movements. The increase in adjusted revenue reflects growth of 12% in Asia, 6% in North America, and 4% in Europe. Revenue in South America was down 11% as a result of reduced vehicle production.
First quarter net income totaled $342 million, or $1.04 per diluted share, compared to net income of $291 million, or $0.42 per diluted share, in the prior year period (refer to footnote 2 for determination of weighted average shares outstanding and earnings per share calculations).
First quarter earnings before depreciation and amortization, interest expense, other income/expense, income tax expense, and equity income (“EBITDA”) was $578 million, compared to $529 million in the prior year period, an increase of 9.3%. EBITDA margin was 14.1% in the first quarter of 2012, compared to 13.2% in the prior year period. The improvement in EBITDA reflects the contribution margin from increased revenue, continued efficiencies resulting from operational improvements, and the absence of non-recurring items, including a commercial settlement charge, in the prior year period. Partially offsetting these improvements were unfavorable currency and commodity movements, lower sales and earnings in our Thermal business segment primarily reflecting the softness in South American production volumes, and $29 million of increased expense resulting from the variable accounting impacts related to the Company’s 2010 Long-Term Incentive Plan.
Interest expense for the first quarter totaled $35 million, compared to $6 million in 2011, reflecting the debt financing incurred at the end of the first quarter of 2011 to redeem the ownership interests previously held by General Motors Company and the Pension Benefit Guaranty Corporation.
Tax expense for the first quarter was $77 million, resulting in an effective tax rate of approximately 18%, compared to $116 million, or an effective rate of 28%, in the prior year period. The improvement in 2012 primarily reflects the impacts of the geographic mix of pretax earnings, tax planning initiatives, and the reduction of withholding taxes.
In the first quarter of 2012, the Company generated net cash flow from operating activities of $293 million, as compared to $156 million in the prior year period, reflecting the increase in net earnings and lower investment in working capital. Cash flow before financing totaled $53 million compared to $39 million in the prior year period.
As of March 31, 2012, the Company had cash and cash equivalents of $1.4 billion and access to $1.3 billion in undrawn committed bank facilities, providing the Company with $2.7 billion of total liquidity. Total debt outstanding as of March 31, 2012 was $2.1 billion.
Credit Ratings Upgrades
In the first quarter of 2012, Delphi’s corporate credit ratings were raised to ‘BB+’ from ‘BB’ by Standard and Poor’s, and to Ba1 from Ba2 by Moody’s Investor Services, both with a stable rating outlook. This reflects continued progress toward the Company’s goal of achieving an investment grade credit rating.
Q2 2012 and Full Year 2012 Outlook
The Company’s Q2 2012 and full year financial guidance reflects a significant strengthening of the U.S. dollar, which negatively impacts year over year comparisons. The Company’s Q2 and full year financial guidance continues to reflect an estimated average exchange rate of $1.30 per Euro, as compared to the average exchange rate for Q2 2011 and full year 2011 of $1.44 per Euro and $1.39 per Euro, respectively.
Our revised full year earnings per share guidance reflects an increased outlook for operating earnings, including reduced depreciation, partially offset by increased variable accounting impacts of the Company’s 2010 Long-Term Incentive Plan. Full year operating cash flow is expected to be approximately $1.75 billion, and full year cash flow before financing is expected to be approximately $1.0 billion, which includes $750 million of estimated capital expenditures. The Company estimates a full year tax rate of approximately 19%. Quarterly tax rates can be affected by the geographic mix of pretax earnings as well as the timing of discrete tax items. The second quarter effective tax rate is estimated to be 21% – 23% resulting from the anticipated geographic mix of pretax earnings and the timing of future tax planning initiatives.