Delphi shares jump 10% after strong quarter and self-driving tech focus
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Delphi shares jump 10% after strong quarter and self-driving tech focus

Delphi Automotive, one of the world’s largest suppliers of auto-parts, saw its share price jump by 10% following a stellar quarter. The company reported revenues of $4.3 billion, a 9% increase, year-on-year, adjusted for currency fluctuations, acquisitions and divestitures. This easily beat analysts’ expectations of $4.12 billion. The company did even better when it came to the bottom line, posting a 17% increase in adjusted earnings from the year-ago quarter; that means that Delphi reported $1.59 earnings per share against forecasts of $1.46.

Post-surge, Delphi’s share price is up almost 30% so far this year

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SOURCE: Yahoo Finance

The strength of these results, however, was only part of the reason that the company traded up. Delphi’s management used the earnings release to signal an important tactical shift in its operations, announcing that it would spin off its powertrain business and become a pure-play for automated driving technology. Self-driving cars are widely believed to be the next big automotive shift, they’re already a reality, and getting closer to market every day.

Delphi’s president and CEO, Kevin Clark, made the following statement about the company’s new focus:

"Looking ahead, new mobility will be defined by the convergence of automated driving, increased electrification, and connected infotainment, all enabled by exponential increases in computing power and smart vehicle architectures."

Through a press release, he also spoke more generally about the company’s future:

“As a result of our strategy to grow and expand through organic investments, acquisitions, and strategic partnerships aligned to the safe, green and connected industry megatrends, our Electrical/Electronic Architecture and Electronics & Safety businesses are well positioned for significant growth as the only global provider of an integrated 'brain and nervous system' of the vehicle. We have the advanced technologies, engineering capabilities, and cost structure to be a global leader in the rapidly evolving mobility sector.”

Disclosure

Dominion holds Delphi Automotive in its Global Trends Managed Fund.


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