Auto parts maker Aptiv joins rivals to flag earnings hit from China lockdowns
By Nathan Gomes
-Auto part supplier Aptiv Plc warned of a hit to its current quarter earnings on Thursday, joining rivals who have also flagged a dent in auto production due to the ongoing COVID-19 lockdowns in China, one of the biggest auto markets.
“We believe the second quarter will be significantly impacted by the COVID-related lockdowns in China,” Chief Financial Officer Joseph Massaro said during an analyst call.
Aptiv has a “heavy presence” in Shanghai, a city that has been under strict lockdowns due to surging COVID-19 cases.
Last week, Canadian auto parts maker Magna International Inc lowered its annual profit forecast, in part due to the lockdowns. BorgWarner Inc has also warned of a hit to its second-quarter revenue.
Aptiv, though, kept its full-year forecast intact after posting better-than-expected first-quarter results, as demand for its electrical components and software from carmakers investing billions to switch to making electric vehicles.
“We and most others expected APTV to cut guidance amid
elevated macro pressures…..yet APTV surprised to the upside by maintaining its guide,” said Credit Suisse analyst Dan Levy.
CFRA analyst Garrett Nelson, though, expects Aptiv to cut forecast in the subsequent quarters due to lower margins.
Aptiv’s net income fell 73.8% to $73 million, or 27 cents per share for the quarter ended March 31 from a year earlier, in part due raw material prices and supply chain disruptions.
On an adjusted basis, the Dublin, Ireland-based company posted a profit of 63 cents per share, ahead of expectations of 61 cents.
Net sales rose about 4% to $4.18 billion, beating analysts’ estimates of $4.04 billion.