Delphi's Downer

If there's an oracle at Delphi (NYSE: DPH  ) , today it had some not-so-stellar news. Although the auto parts provider "beat" expectations, its 57% drop in earnings is hardly worth much celebration. While Delphi's plans are still underway to improve its outlook and growth picture, it's hard to prophesize recovery just yet.

The company has been suffering from both a brutally competitive market in automobiles and subsequently, its reliance on business from auto giant and former parent General Motors (NYSE: GM  ) . The situation mirrors that of fellow parts maker Visteon (NYSE: VC  ) , which has been trying to ease itself away from its own former parent, Ford (NYSE: F  ) .

Delphi reported net income of $54 million, or $0.10 per share; if you back out charges related to its restructuring, then earnings came in at $123 million, or $0.22 per share, compared to $127 million, or $0.23 per share. Revenues increased 3.2% to $7.4 billion.

Production cuts at GM lie at the crux of Delphi's problems, leading us to one element that Delphi emphasized today: its decreasing reliance on GM, with revenues from other sources up 23%. In addition, Delphi's been adding other product lines to coax revenues from new businesses altogether. These include household appliances, as well as satellite radios that work with XM Satellite Radio's (Nasdaq: XMSR  ) service, but thus far, those extensions of its business only make up a small amount of sales.

Delphi and Visteon may face similar issues, but it's not necessarily a thumbs-down for everybody involved in the auto parts arena. Consider the good fortunes of a rival, Motley Fool Stock Advisor pick BorgWarner (NYSE: BWA  ) . Not only has BorgWarner been truckin' along, it recently said it expected higher first-quarter revenues due to strong demand for its products.

Delphi's quarter wasn't too impressive, but by the way shares were only down a tad in recent trading, one would imagine investors expected it. Even beyond some of the difficulties Delphi's working through, higher steel prices are expected to have an adverse effect on every company mentioned above, giving a whole new reason to cast a cautious eye.

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Alyce Lomax does not own shares of any of the companies mentioned.