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Delphi Automotive raises full-year profit, revenue forecasts
[BENGALURU] Vehicle component maker Delphi Automotive Plc raised its full-year forecasts, driven by a strong second quarter and growth prospects in electrification and safety systems, including those being developed for self-driving vehicles.
The company said it expected full-year adjusted earnings of US$6.55 to US$6.75 per share, up from its previous forecast of US$6.40 to US$6.70 per share.
"The transformation of the auto industry (is) at the heart of our strategy," said Kevin Clark, Delphi president and chief executive officer, in a conference call with analysts on Wednesday.
Delphi, which is refocusing much of its future business on self-driving vehicles and advanced safety systems, said it expects full-year revenue of US$16.85 billion to US$17.05 billion.
The company had previously forecast revenue of US$16.50 billion to US$16.90 billion.
Delphi anticipates increased growth in Asia, led by China, as North American vehicle production declines further in the second half, according to Joe Massaro, chief financial officer.
Delphi said it "remains on track" to complete the spinoff of its internal combustion engine business by March 2018. That unit, called Powertrain Systems, accounted for 27 per cent of the company's revenue in the quarter.
Company officials will provide more details on the spinoff at a September 27 investor conference in Boston, Mr Clark said.
Income from continuing operations rose to US$369 million, or US$1.38 per share, in the second quarter ended June 30, from US$258 million, or 94 cents per share, a year earlier.
On an adjusted basis, the company earned US$1.71 per share, beating analysts' estimate of US$1.65, according to Thomson Reuters I/B/E/S.
Revenue rose 2.7 per cent to US$4.32 billion.
Delphi paid an effective tax rate of 14 per cent in the quarter, compared with 24 per cent a year earlier.
Net cash flow from operations increased to US$599 million, up 4 per cent.
In mid-morning trade Wednesday, Delphi shares were down 0.7 per cent at US$89.19. Through Tuesday's close, shares had risen 33.4 per cent this year.