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Delphi exceeds estimates
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October 13, 1999: 11:47 a.m. ET
Former GM parts division bounces back from strike of a year earlier
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NEW YORK (CNNfn) - Delphi Automotive Systems, the former General Motors parts division, recovered from a 1998 strike to slightly exceed analyst expectations in its third quarter, the company reported Wednesday.
Troy, Mich.-based Delphi (DPH), the world's largest auto parts company that was spun off as a separate company in February, had net income of $136 million, or 24 cents a diluted share, in the quarter ended Sept. 30. That was slightly above the 23 cents a share consensus of analysts surveyed by First Call.
The company had a pro forma net loss of $214 million in the year-earlier quarter, which included the 54-day strike by the United Auto Workers that crippled General Motors (GM).
Revenue was $6.8 billion, up 12.9 percent from a year earlier. The revenue from GM contracts grew 9.9% to $5.1 billion from the strike-impacted number a year earlier. But the non-GM contracts rose even faster, gaining 22.9 percent to $1.7 billion, as the company continued its efforts to diversify its customer base.
"The third quarter is typically a challenging period for us," said J.T. Battenberg III, the company's chairman, chief executive and president. "These results reflect the continued strong North American vehicle market as well as increases in sales to customers other than GM."
The company announced a contract Tuesday from Catepillar Inc. (CAT), the world's leading heavy equipment manufacturer, to co-develop engine controllers for all of Caterpillar's diesel engines and many Caterpillar machines starting in mid-2001, as well as developing a new line of hydraulic control modules for the company. The value of the contract was not disclosed.
Delphi also announced a new division Wednesday to focus on after-market sales of its parts.
Delphi's stock rose ¼ to 16-3/8 in late morning trading Wednesday.
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