Delphi Automotive PLC (DLPH) saw a 15.5% rise in adjusted earnings to 97 cents per share in the third quarter of fiscal 2013 from 84 cents in the prior-year quarter. It also exceeded the Zacks Consensus Estimate of 94 cents a share. Net income increased 11.4% to $302 million from $271 million a year ago.
Including special items consisting of restructuring charges and costs associated with acquisition and integration, Delphi Automotive reported profit of $271 million or 87 cents per share in the third quarter of 2013 compared with $269 million or 84 cents per share a year ago.
Revenues rose 9.7% to $4.02 billion, almost in line with the Zacks Consensus Estimate. After adjusting the currency exchange, commodity movements, acquisitions and divestitures, revenues increased 3% year over year. Better performance in Asia by 10% and by 9% in North America, contributed to the improvement, but was partially offset by decline in Europe and South America by 5% and 2% respectively.
Operating income increased 5.4% to $387 million from $367 million in the third quarter of fiscal 2012. Adjusted operating income was $428 million against $370 million in the prior-year period. Operating margin was 10.7% versus 10.1% a year ago.
Adjusted earnings before depreciation and amortization, interest expense, other income (expense), income tax expense, equity income, restructuring and acquisition integration (adjusted EBITDA) increased 17.2% to $566 million in the quarter from $483 million in the third quarter of 2012. EBITDA margin was 14.1% versus 13.2% a year ago. The year-over-year improvement in EBITDA was due to better performance in Asia and North America together with benefits from increased earnings from the acquisition of the Motorized Vehicles Division (MVL).
Segment Details
In the Electrical/Electronic Architecture segment revenues rose 22% to $2 billion. Adjusted EBITDA increased 46% to $309 million in the quarter from $211 million in the third quarter of 2012.
In the Powertrain Systems segment revenues declined 4% to $1.04 billion. Adjusted EBITDA decreased 16% to $142 million from $169 million in third-quarter 2012.
The Electronics and Safety segment’s revenues improved 9% to $705 million. Adjusted EBITDA climbed 27% to $100 million from $79 million in the third quarter of 2012.
In the Thermal Systems segment revenues dropped 3% to $364 million. Adjusted EBITDA fell 38% to $15 million from $24 million in the prior-year period.
Share Repurchase
Delphi Automotive repurchased about 2.12 million shares for $120 million in the third quarter of 2013. It repurchased about 7.42 million shares for $362 million in the first nine months of 2013. As of Sep 30, 2013, the company had roughly $285 million available on its share repurchase program.
Financial Position
Delphi Automotive had cash and cash equivalents of $1.05 million as of Sep 30, 2013, compared with $1.10 million as of Dec 31, 2012. Total debt amounted to $2.4 billion as of Sep 30, 2013, compared with $2.5 billion as of Dec 31, 2012. The long-term debt-to-capitalization ratio stood at 42.9%, versus 46.6% as of Dec 31, 2012.
In the first nine months of 2013, operating cash flow dipped to $1.1 billion from $1.2 billion in the year-ago period. Capital expenditure was $512 million compared with $563 million in the same period a year ago.
Outlook
Delphi Automotive expects adjusted earnings between $4.25 to $4.35 per share for 2013 compared to the previous guidance of $4.22 and $4.45 per share. Revenues are expected in the range of $16,300–$16,400 a slight change from the earlier estimate of $16,300-$16,500. Adjusted EBITDA is expected to be in the band of $2,350–$2,370 with a margin between 14.4%–14.5%.
The company decreased capital expenditure guidance to $700 million from $750 million earlier.
Delphi Automotive, is one of the largest vehicle components manufacturer companies, and provides electrical and electronic services, powertrain systems, and safety and thermal technology solutions to the global automotive and commercial vehicle markets.. Currently, it carries a Zacks Rank #2 (Buy).
Other stocks worth considering in the same industry are Denso Corp. (DNZOY), Federal-Mogul Corp. (FDML) and Gentex Corp. (GNTX). All carry a Zacks Rank #1 (Strong Buy).
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