Delphi profits up 11 percent
Delphi Automotive said Friday net income rose 11 percent to $325 million in the third quarter, amid strong auto sales in North America and Asia.
The Gillingham, England-based company with major operations in Troy said its profit margin was 11.3 percent on $4.1 billion in revenue — up 3 percent. The company’s profit margin is above the profit margins of major U.S. automakers.
For the first nine months of the year, the company has reported revenue of $12.9 billion, up 5 percent, and profits of $1.5 billion, up 9 percent. For the year, its profit margins are 11.6 percent — 0.4 percent above last year. For the year, the company has bought back shares and issued dividends worth $902 million. The company bought back 4.4 million shares in the most recent three months ending Sept. 30.
“Our record third quarter financial results demonstrate continued outstanding operating performance and the leverage of our operating model,” said Rodney O’Neal, chief executive officer and president. “The entire Delphi team remains committed to building shareholder value and achieving our key objectives for the year.”
Auto suppliers, after years of struggling and consolidation, are now in much stronger shape and have been boosted by rising auto sales around the world. The company’s revenue was up everywhere except South America, where revenue was down 20 percent and the company plans to make some staffing cuts in response to lower demand. Asia revenue was up 9 percent, while revenue in North America was up 6 percent and Europe up 1 percent.
Delphi said in a securities filing that it has mounted “several restructuring programs which include workforce reductions as well as plant closures.” Delphi has set aside $124 million this year to pay for its ongoing restructuring programs “focused on aligning manufacturing capacity and footprint with the current automotive production levels in Europe and South America.”
For the entire year, Delphi has repurchased 10 million shares for approximately $674 million.
Delphi was the supplier of ignition switches in 2.6 million older General Motors cars that have been linked to at least 29 deaths and O’Neal testified before a Senate committee in July. Delphi has turned over documents to a federal grand jury in New York among other requests from government agencies for information. It’s also been named as a defendant in various lawsuits.
“Delphi believes the allegations contained in the product liability cases are without merit, and intends to vigorously defend against them. Although no assurances can be made as to the ultimate outcome of these or any other future claims, Delphi does not believe a loss is probable and, accordingly, no reserve has” been set aside, the company said.