Delphi Technologies, the former powertrain unit of Delphi Automotive, reported a surge in fourth-quarter net income, aided by a tax gain, even as revenue dropped.
Fourth-quarter net income rose 141 percent to $135 million. Much of the gain stemmed from a $63 million tax gain in the quarter, contrasting with an expense of $27 million during the same quarter a year earlier.
Delphi's shares soared after the earnings report, closing up 19 percent to $21.74. The company's per-share earnings of $1.06 beat the consensus Wall Street estimate of 87 cents, according to a report from Baird Equity Research.
The company's interest expense rose 54 percent to $20 million. The company said the increased expense reflects the interest related to the issuance of about $1.5 billion of debt in connection with the separation from its former parent.
The company reported fourth-quarter revenue of $1.2 billion, a decrease of 9 percent from a year earlier. Adjusted revenue was flat, reflecting a 6 percent decrease in powertrain systems business and 3 percent growth in aftermarket.
For 2018, the company reported revenue of $4.9 billion, flat compared with the previous year. Net income last year rose 26 percent to $358 million.
"2018 was a milestone year for Delphi Technologies. In our first full year as a public company we continued to build on our momentum in key growth technologies, resulting in a record $10 billion of new business awards," CEO Richard Dauch said. "We also made great progress in creating a strong foundation as a stand-alone company from which to drive long-term growth."
For 2019, the supplier expects full-year revenue of $4.65 billion-$4.75 billion.
Delphi Technologies ranks No. 58 on Automotive News' list of the top 100 global parts suppliers, with global sales to automakers of $3.90 million in 2017.