Delphi posts $2.3 billion second-quarter net loss, $232 million first-quarter operating loss

By Caroline Salls

Pittsburgh, Aug. 15 - Delphi Corp. reported a second-quarter net loss of $2.3 billion on revenues of $7 billion, according to a company news release.

The net loss for the period ended June 30 was up from $338 million in the second quarter of 2005. Revenue for the 2005 period was also $7 billion.

Delphi said the second-quarter net loss included charges related to the special attrition programs, including a $1.5 billion net pension and post-employment benefit curtailment charge, primarily due to reductions in anticipated future service as a result of the retirements, and $392 million of charges related to the pre-retirement and buyout portions of the special attrition programs.

Non-General Motors revenue for the second quarter was $3.9 billion, up about 9% from $3.6 billion in the second quarter of 2005.

Second-quarter cash flow provided by operating activities was $280 million, compared to cash flow used in operating activities of $305 million in the same period of 2005.

First-quarter results

The company reported a $232 million operating loss for the quarter ended March 31 on $6.973 billion in net sales, according to a 10-Q filing with the Securities and Exchange Commission.

The figures compare to a $324 million operating loss for the same period of 2005 on $6.862 billion in net sales.

According to a company news release, non-General Motors Corp. revenue for the quarter was $3.8 billion, up about 8% from $3.5 billion in the first quarter of 2005.

Delphi said non-General Motors business represented 54% of quarter-one revenues, compared to year-ago levels of 50%.

The net loss for the first-quarter of 2006 was $363 million, down from a $403 million net loss the year before.

Cash and cash equivalents on March 31 were $1.869 billion, compared with $2.221 billion on Dec. 31, 2005.

First-half results

For the first half of 2006, the company reported revenues of $14 billion and a net loss of $2.6 billion, including charges of $1.9 billion associated with the company's special attrition program, according to the release.

Delphi said it generated $187 million in cash flow from operations in the first half of the year.

Non-General Motors revenues grew 9% year over year to $7.7 billion, representing 55% of global revenues, the release said.

"In the first half of the year, Delphi achieved an 85% acceptance rate of UAW employees signing up for its special attrition program," chief financial officer Robert Dellinger said in the release.

"The attrition programs are a step in our transformation; however, we continue to experience losses reflecting an uncompetitive U.S. cost structure.

"Our leadership is addressing these issues with our stakeholders, including our unions and General Motors, as part of our reorganization proceedings through the bankruptcy court."

First-half cash flow provided by operating activities was $187 million, compared with $224 million provided by operating activities for first half 2005.

According to the release, charges related to the special attrition programs are also included in the first-half net loss.

Delphi, a Troy, Mich.-based automotive electronics manufacturer, filed for bankruptcy on Oct. 8, 2005 in the U.S. Bankruptcy Court for the Southern District of New York. Its Chapter 11 case number is 05-44481.

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