DETROIT -- Delphi Technologies Inc. reported a drop in first-quarter net income on lower revenue, unfavorable product mix and lower production volume.
Net profit at the powertrain supplier fell 84 percent to $16 million from a year earlier. Adjusted net income decreased 49 percent to $59 million because of lower revenue from higher margin passenger car diesel fuel injection systems, and an increase in revenue of lower margin advanced gasoline direct injection fuel systems and power electronics products, the supplier said.
Delphi said it was also impacted by lower light-vehicle production and unfavorable currency rates that were primarily offset by improvements in operating performance.
Revenue totaled $1.2 billion during the quarter, a decrease of 11 percent, or a decrease of 6 percent when adjusted for currency exchange rates. Delphi said its first-quarter adjusted revenue reflected a decrease of 7 percent in sales at the powertrain systems unit and a decrease of 6 percent in aftermarket sales.
Delphi's capital expenditures nearly doubled to $131 million in the first quarter from $66 million a year earlier. The powertrain supplier is increasing investment spending to support long-term growth in key technologies, specifically gasoline direct injection fuel systems and power electronics products.
The company said interest expenses decreased to $18 million during the quarter from $20 million a year earlier.
It is the supplier's second first-quarter earnings report since splitting from the former Delphi Automotive in December 2017. Delphi Automotive is now called Aptiv.
The company's first-quarter adjusted operating income fell 45 percent to $87 million. Adjusted operating margin decreased 470 basis points in the first quarter of 2019 to 7.6 percent because of unfavorable product mix, decreased volume and adverse currency exchange movements, Delphi said.
Sales at the supplier's powertrain systems unit fell 12 percent to $1.02 billion, while aftermarket business decreased 11 percent to $193 million.
The company reaffirmed its full-year outlook for 2019.
"Consistent with our vision to be the pioneers in propulsion technology solutions which enable vehicles to drive cleaner, better and further, we continue to have strong momentum on key initiatives that will support our long-term growth," Delphi CEO Rick Dauch, who took over in January, said in a statement. "Having completed my initial orientation of the company in Q1, I am even more bullish about the opportunity here at Delphi Technologies to create value for all our stakeholders. We are now working at pace to define, prioritize and resource the actions we will take to ensure this potential becomes a reality."
