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Delphi Technologies PLC DLPH

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Delphi's Second-Quarter Results Trounced by Coronavirus but Beats Light Vehicle Production

Richard Hilgert Senior Equity Analyst

Analyst Note

| Richard Hilgert |

No-moat Delphi Technologies reported second-quarter losses per share before special items of $0.58, $0.31 above the CapIQ consensus estimate for a loss of $0.89 but, thanks to the coronavirus-induced factory closures, $1.16 below the year ago reported EPS of $0.58. Revenue declined 44% to $628 million but would have been down 41% excluding the negative currency effect. The change in revenue beat the 45% decline in global light vehicle production by 4 percentage points. Adjusted operating income swung into red ink at negative $43 million, down from a profit of $81 million last year on the negative operating leverage. Despite COVID-19 trouncing profitability, the decremental margin was a solid 25%. We attribute the better decremental margin performance to cost-reduction efforts already initiated prior to the COVID-19 pandemic.

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Company Profile

Business Description

Delphi Technologies’ main products are fuel injection and valvetrain systems along with the sensors and software controls for each, representing approximately 68% of 2019 total revenue. With a diverse base of vehicle manufacturer customers, no single automaker represents 10% of the company's revenue. Regionally, this global parts supplier had about 45% of 2019 revenue from Europe, Middle East, and Africa; 28% from North America; 24% from Asia-Pacific; and 3% from South America.

One Angel Court, 10th Floor
London, EC2R 7HJ, Jersey
T +44 2030574300
Sector Consumer Cyclical
Industry Auto Parts
Most Recent Earnings Jun 30, 2020
Fiscal Year End Dec 31, 2020
Stock Type
Employees 21,000