DETROIT -- In its first quarterly report since splitting from Delphi Automotive, Delphi Technologies posted record revenue, spurred by strong gains in Asia, but a drop in net income from a year earlier.
Adjusted operating income rose 23 percent to $164 million, due to revenue growth, strong operational performance and foreign exchange benefits, according to the company.
The powertrain supplier's net income for the quarter ended Dec. 31 dropped 28 percent to $56 million from a year earlier, it reported Wednesday. Revenue rose 12 percent to $1.29 billion. Excluding special items, revenue increased 9 percent, the company said.
Delphi Automotive split into two public companies in early December -- Delphi Technologies, which will focus on gasoline-engine and electric powertrains, and Aptiv, which will focus on connected and autonomous vehicle technologies. The earnings report is carved out of Delphi Automotive's accounting, as though Delphi Technologies had operated the entire quarter as a standalone company.
Fourth-quarter sales at the new company's powertrain systems business rose 14 percent to $1.1 billion, influenced by strong performance in gasoline direct-injection systems, commercial vehicles and power electronics, but was partially offset by a decline in light-duty diesel revenues, CFO Vivid Sehgal said on a conference call with investors and reporters on Wednesday.
Sehgal said Delphi Technologies' full-year 2018 cash flow will feel the likely impact of $75 million-$80 million in one-time separation costs, $95 million-$100 million in restructuring charges and elevated foreign currency exchange costs in the range of $280 million-$300 million "due to separation activities."
For the year, Delphi expects its full-year revenue outlook to fall between $4.9 billion and $5.1 billion, beating analysts' $4.9 billion consensus.
Sales advanced 19 percent in Asia, 5 percent in Europe and 16 percent in South America. Sales increased by 3 percent in North America.
"Our strong revenue performance was driven by growth in all of our regions and especially in China," said Sehgal.
Fourth-quarter tax expenses increased to $27 million for the quarter, up from $23 million a year earlier -- an effective tax rate of 30 percent in the recent quarter, compared with 21 percent in 2016. The increase reflects activities related to the completed separation last year, the company said.