Delphi is an attractive target for a company that wants to get into autonomous driving

Delphi Automotive PLC (DLPH) manufacturers vehicle components; and provides electrical and electronic, powertrain, and safety technology solutions to the automotive and commercial vehicle markets worldwide. It operates through three segments: Electrical/Electronic Architecture, Powertrain Systems, and Electronics and Safety.

Shares have recently moved higher on speculation that the company is a take over target. The Wall Street Journal gave credence to the rumors by publishing an article speculating that Delphi is an attractive take-over target for a high tech firm such as Tesla (TSLA).

Delphi which is now a UK-based company has recently joined forces with high tech firms regarding autonomous driving. It recently teamed up with Israel-based Innoviz Technologies for enhancement of vehicle safety for the self-driving cars. Notably, before tying up with Innoviz Technologies, which develops advanced remote-sensing solutions for mass commercialization of autonomous vehicles, Delphi made a minor investment in that company.

It’s the second company that specializes in light detection and ranging sensors (LiDAR) in which Delphi has made a strategic investment. In 2015, Delphi bought a stake in Quanergy Systems as part of a $90 million funding round.

Earnings

Delphi has reported solid earnings recently. Delphi’s second-quarter revenue rose 3% to $4.3 billion; the growth was 5% when adjusted for currency exchange, commodity movements, acquisitions, and divestitures. That was higher the $4.2 billion that was expected. The company’s earnings from continuing operations checked in with a 13% increase to $1.71 per share year over year. Estimates had called for $1.65 per share.

Delphi now predicts its full-year revenue to check in between $16.85 billion and $17.05 billion, up from its previous guidance calling for $16.50 billion to $16.90 billion. It raised bottom-line guidance also, and expects its full-year adjusted earnings to check in between $6.55 and $6.75 per share, up from its previous guidance of $6.40 to $6.70 per share.

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