Delphi looks to new year after disappointing fourth quarter
Dayton Business Journal - by Don Baker
Delphi Automotive Systems plans to shift more of its product mix toward high-tech electronics and will become aggressive in cutting costs this year.
The news came on a day when the Troy, Mich.-based auto parts maker announced it earned net income of $1.1 billion during fiscal 2000 on slightly lower revenue of $29.1 billion.
Full-year results were positive, but the fourth-quarter net income of $200 million and revenue of $4.8 billion were both lower than the same period in 1999. J.T. Battenberg III, Delphi chairman, chief executive officer and president, blamed the weaker performance in the fourth quarter on the slowing auto sales.
"We are cautiously optimistic that Delphi will experience another good year, and we are working aggressively to reduce structural costs and eliminate waste in line with lower anticipated industry volumes in 2001," Battenberg said.
He said the company, which operates several plants in the Dayton area and is the largest auto parts maker in the world, took immediate actions during the fourth quarter to combat the expected lower revenue.
"We were successful in moderating the impact of the rapid fourth quarter order decline through aggressive inventory management, workforce adjustments and other cost reduction initiatives," Battenberg said.
Diluted earnings per share for the full year were $1.94, compared to $1.95 for 1999. Earnings per share for the fourth quarter were 36 cents, compared to 48 cents for the same period last year.
Because of the overall strong performance for the full year, Delphi notified employees today that the company will pay profit sharing bonuses to eligible U.S. hourly and salaried employees in mid-March.
For the first quarter of 2001, Delphi announced it expects sales to be in the range of $6.5 billion to $6.6 billion, net income to be between $90 million to $120 million and operating cash flow for the period between $150 million to $200 million.
Delphi, http://www.delphiauto.com, said its sales to former parent-company General Motors Corp. decreased to $20.6 billion for the full year, down from the $22.3 billion for 1999. Delphi has a goal of decreasing its dependence on doing business with GM.
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