Delphi Reiterates Guidance for Second Quarter Performance and Addresses Full Year Outlook
biz.yahoo.com
SAGINAW, Mich., June 19 /PRNewswire/ -- Delphi Automotive Systems (NYSE: DPH - news) Chairman, CEO and President J.T. Battenberg III, and other Delphi senior executives, hosted a lean manufacturing session and general business update for security analysts and institutional investors here today. During the afternoon session, Chief Financial Officer Alan S. Dawes will reiterate and refine the company's second quarter and calendar year financial performance outlook. An audio webcast, as well as Dawes' presentation, will be available in conjunction with the business update beginning at 3:00 p.m. EDT today. The webcast may be accessed through the Investor Relations page of Delphi's website at delphiauto.com .
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Addressing the second quarter, Dawes said, ``Over the last 90 days, North American vehicle production has generally progressed as we anticipated, but we continue to see weakness in U.S. aftermarket sales and evidence of softening vehicle demand in Europe.'' Dawes said ongoing cost reduction actions by Delphi, leveling of vehicle production volumes in the United States, as well as stronger than expected consumer spending are expected to help Delphi meet its goals during the second quarter. Delphi intends to announce second quarter financial results on July 18.
For 2Q 2001, Dawes said he expects Delphi to perform at the low end of the company's prior guidance range of net income of $160 million to $200 million on revenues between $6.8 billion to $6.9 billion. He said Delphi expects second quarter operating cash flow before cash restructuring costs at the low end of the $300 million to $400 million range. Dawes noted that First Call consensus estimates for the second quarter as of June 18 are below the low end of the company's prior guidance range.
In addition, Dawes said the company's headcount restructuring plans to reduce global employment by 11,500 people are on track. ``During the quarter, more than 2,400 employees are expected to separate from the company, giving us a 38 percent completion rate on the restructuring initiatives through the first half of 2001.'' Delphi anticipates an additional 5,700 to 6,200 employees to separate during the second half of the year, with the balance to occur by the end of the first quarter in 2002. The impact of employee separation cash costs is expected to be less than $175 million during the quarter, with $250 million to $350 million for the full year.
Dawes said First Call consensus estimates for the calendar year as of June 18 are directionally in line with Delphi's estimates, given the current progress of restructuring related actions. He said it was reasonable to expect the company to earn calendar year net income in the range of $367 million on revenues of $26.5 billion, and to generate operating cash flow of $750 million, before the impact of restructuring and impairment charges. However, he indicated that the organization is working to increase earnings levels. ``Production schedule leveling, ongoing portfolio actions and continued progress on restructuring plans during the next six months may provide additional earnings upside opportunities,'' Dawes said. |
