News

Delphi Reports Drop in First-Quarter Earnings

April 15, 2004 by Jeff Shepard

Delphi Corp. (Troy, MI) reported a 57-percent drop in first-quarter earnings, hurt by restructuring charges and production cuts by its largest customer, General Motors Corp. (GM, Dearborn, MI). Lower tax rates and higher revenue from automakers other than GM pushed earnings above most analysts' estimates. General Motors cut its North American production of new vehicles by seven percent in the first quarter, due to growing inventories of unsold cars and trucks.

The company said profit fell to $54 million, or $0.10 per share, from $127 million, or $0.23 per share, a year earlier. Earnings were within Delphi's January forecast for first-quarter net profit of $30 million to $80 million, including restructuring charges of $45 million to $65 million. Excluding restructuring charges, Delphi earned $123 million, or $0.22 per share. The first-quarter restructuring charges were related to Delphi's plans announced last October to cut its worldwide work force by 8,500 jobs, or nearly five percent, by the end of 2004, resulting in total charges of $807 million before taxes. Most of those charges were taken last year.

Delphi said it expected second-quarter net income of $105 million to $145 million, or between $0.19 and $0.26 per share, including $20 million to $40 million in after-tax restructuring costs. Excluding those costs, earnings are expected to total $145 million to $165 million, or between $0.26 and $0.29 per share. Delphi said it expected second-quarter revenue of between $7.5 billion and $7.8 billion.