DELPHI CORP. Auto parts giant reports 60 percent earnings drop
Delphi earnings and revenue were hurt by unusual happenings.
THE VINDICATOR, YOUNGSTOWN, OHIO
Delphi Corp. earnings fell 60 percent in the second quarter as the auto parts giant struggled with weak demand, legal costs and plant closing expenses.
Troy, Mich.-based Delphi, which is the parent of Delphi Packard Electric Systems, said today that it earned $88 million, or 16 cents a share, last quarter. In the same quarter last year, it earned $220 million, or 39 cents a share.
Alan Dawes, Delphi vice chairman and chief financial officer, said the company's performance was hurt by weak production volumes, including the shutdown of a General Motors' plant in Oklahoma City which was hit by a tornado.
The company also paid a court judgment of $38 million before taxes in a case involving a former supplier, Nelco Technology.
Also included in last quarter's expenses was a charge of $35 million before taxes for restructuring costs, related to plant closings and employee separation packages.
Delphi recorded revenue of $7.1 billion in the second quarter, which was down 3 percent from $7.3 billion in the same quarter last year.
What predicted
Despite lower earnings and revenues, Delphi is still on track to meet its earlier financial projections for the year, said J.T. Battenberg III, Delphi's chairman, president and chief executive. He cited the unusual expenses, particularly the court judgment, as hampering the second quarter.
Dawes said revenue for this year is expected to be between $27.5 billion and $28 billion. He reaffirmed earlier earning projections of between $375 million and $475 million but added that it now looks like 2003 earnings will be in the lower half of that range. For the third quarter, the company expects revenues of $6.6 billion and earnings that are just above break even.