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Delphi Technologies (DLPH) Rallies 6.9% Since Q2 Earnings

Zacks Equity Research
·3 min read

Shares of Delphi Technologies DLPH have gained 6.9% since it reported its second-quarter 2020 results on Aug 5 against the 2.9% decline of the industry it belongs to.

 

The outperformance can be attributed to the company’s better-than-expected second-quarter 2020 results and healthy cash flow.

Adjusted loss of 58 cents per share was narrower than the Zacks Consensus Estimate by 34.8% and revenues of $628 million beat the consensus mark by 13.2%.

During the reported quarter, the company generated $10 million of cash from operating activities. Also, cash proceeds of nearly $40 million earned from the sale of a technical center further strengthens the company’s balance sheet.

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Notably, earnings fell more than 100% year over year.

Total revenues decreased 44% year over year on a reported basis and 41% on an adjusted basis (adjustments were made for currency exchange). The downside was mainly due to lower global production and the closure of customer-production sites related to the coronavirus outbreak and the downward trend in passenger car diesel fuel injection systems in Europe, partially offset by solid growth in  Power Electronics.

Let’s delve deeper into the numbers

Revenues in Detail

Segment-wise, Fuel Injection Systems revenues of $238 million declined 47% year over year.Powertrain Systems revenues of $142 million decreased 55% year over year. Electrification & Electronics revenues of $155 million declined 27% year over year. Delphi Technologies Aftermarket revenues of $128 million declined 40% year over year.

Region-wise, adjusted revenues declined 57% in Europe, 61% in North America and 34% in South America, partially offset by 13% growth in Asia Pacific, including an increase of 41% in China.

Operating Results

Adjusted operating loss was $43 million against an adjusted operating income of $81 million in the prior-year quarter.

Delphi Technologies PLC Price, Consensus and EPS Surprise

Delphi Technologies PLC price-consensus-eps-surprise-chart | Delphi Technologies PLC Quote

Balance Sheet and Cash Flow

Delphi Technologies exited second-quarter 2020 with cash and cash equivalents of $550 million compared with $611 million at the end of the prior quarter. Long-term debt was $1.91 billion compared with $1.94 billion at the end of the prior quarter.

Capital expenditure totaled $60 million.

Currently, Delphi Technologies carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Business Services Companies

Equifax EFX reported better-than-expected second-quarter 2020 adjusted earnings of $1.60 per share, whichbeat the Zacks Consensus Estimate by 22.1% and improved 14.3% on a year-over-year basis. The reported figure exceeded the guided range of 78-88 cents.

IQVIA Holdings IQV reported second-quarter 2020 adjusted earnings per share of $1.18, which beat the consensus mark by 12.4% but decreased 22.9% on a year-over-year basis. The reported figure exceeded the guided range of $1.00-$1.09.

Robert Half RHI reported second-quarter 2020 earnings of 41 cents per share that beat the consensus mark by 17% but were down 58% year over year.

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