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Delphi announces spinoff of powertrain business
[DETROIT] Automotive supplier Delphi Automotive Plc on Wednesday said that it would to spin off its powertrain unit in order to focus on developing technology for autonomous driving systems and electrically powered vehicles.
The company also reported a better-than-expected first-quarter net profit as revenue rose in all regions, and it gave a robust full-year earnings outlook.
Delphi has shed most of its lower-margin automotive supplier businesses in recent years and is seen as one of the companies best placed to grow as the industry moves toward self-driving vehicles.
The spinoff of the powertrain unit will be tax free and is expected to be completed by March 2018, Delphi said.
The powertrain is the mechanism that transmits drive from the engine of a vehicle to its axle.
Delphi shareholders will hold stock in both companies.
The automotive supplier said Liam Butterworth, currently senior vice president and president of the powertrain unit, will become the new company's chief executive.
Delphi reported a quarterly net profit from continuing operations of US$335 million or US$1.24 per share, up from US$320 million or US$1.15 per share a year earlier.
Excluding one-time items, the company reported earnings per share of US$1.59. Analysts had expected an EPS of US$1.46.
Delphi said it expects second-quarter EPS of between US$1.62 and US$1.68 compared with analysts' expectations of US$1.68.