Delphi cuts costs to eke out profit increase
NEW YORK (AP) — Auto parts maker Delphi Automotive PLC said Thursday that its third-quarter net income edged up 1 percent to top expectations as lower costs offset a drop in revenue.
But the U.K.-based company, formerly part of General Motors, forecast fourth-quarter results below Wall Street's expectations and cut the top end of its forecast for the year. Like others in the auto industry, Delphi is faced with further cuts in European car production due to the eurozone's economic problems.
The company earned $269 million, or 84 cents per share, compared with $266 million, or 79 cents per share, a year earlier.
Revenue fell 6 percent to $3.66 billion from $3.93 billion a year earlier, due to a drop in vehicle production in Europe and a stronger dollar versus euro and Brazilian real. But operating expenses shrank by 7 percent to about $3.3 billion, helping to counteract the sales decline. Lower taxes and share buybacks helped buoy Delphi's bottom line and per-share earnings.
Analysts polled by FactSet had expected a profit of 71 per share on revenue of $3.75 billion.
For the full year, Delphi is now predicting earnings between $3.68 and $3.78 per share on revenue of $15.48 billion to $15.58 billion. That's down from a prior range of $3.68 to $3.91 per share on revenue of $15.6 billion to $15.9 billion. Analysts currently predict earnings of $3.76 per share on revenue of $15.82 billion, on average.
Shares rose $1.04, or 3.3 percent, to $32.48 in afternoon trading.