What happened?

Shares of Delphi Automotive (NYSE:DLPH), one of the world's largest auto-parts suppliers focused on powertrains and electrical and safety components, jumped 11% Wednesday after the company delivered better-than-expected results for the first quarter and surprised investors with a strategic announcement.

So what

Starting first with the earnings beat, Delphi's revenue jumped to $4.3 billion during the first quarter, a 9% increase when adjusted for currency exchange, acquisitions, and divestitures, and beating analysts' estimates of $4.12 billion. Its bottom line was even more impressive, with a 17% increase in adjusted earnings, to $1.59 per share.

That bottom-line surge was better than analysts' estimates calling for $1.46 per share. Sure, the company's first quarter was strong, but investors might be more excited about the company's announcement to spin off its powertrain business and have Delphi focus on becoming a pure play for driverless vehicle technology going forward.

A look at what smart car HUDs could look like in the future of driverless vehicles.

Image source: Getty Images.

"Looking ahead, new mobility will be defined by the convergence of automated driving, increased electrification, and connected infotainment, all enabled by exponential increases in computing power and smart vehicle architectures," said Kevin Clark, president and chief executive officer, in a press release. He also said:

As a result of our strategy to grow and expand through organic investments, acquisitions, and strategic partnerships aligned to the safe, green and connected industry megatrends, our Electrical/Electronic Architecture and Electronics & Safety businesses are well positioned for significant growth as the only global provider of an integrated 'brain and nervous system' of the vehicle. We have the advanced technologies, engineering capabilities, and cost structure to be a global leader in the rapidly evolving mobility sector.

Now what

For investors, this is a great move, as the company continues its recent trends of shedding lower-margin business and focusing on what will shape the automotive industry over the next two to three decades. It's a move that should protect investors from the plateauing U.S. new-vehicle sales market, because providing driverless vehicle technology should provide revenue growth above what global vehicle demand provides alone. 

Daniel Miller has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.