Forvia raised its annual sales and margin forecasts, saying it expected global automotive production to grow faster than previously anticipated.
The supplier sees 2023 sales of 26.5-27.5 billion euros ($29.4-30.5 billion), up from the previous outlook of 25.2-26.2 billion euros, and an operating margin of between 5.2 percent and 6.2 percent of sales, versus 5 percent to 6 percent before.
A trader said the guidance upgrade was “not very impressive” in light of the higher production estimate. “Positioning is long, not good enough this morning; especially after the recent strong share price run,” the trader said.
The stock, down 4 percent as of 08:12 GMT, has gained around 67 percent this year.
Global automotive production grew more than 10 percent in the first half of the year, on sustained demand and gradual improvement in semiconductors supply, CEO Patrick Koller said in a statement.
China’s decision to curb exports of two metals widely used in semiconductors and electric vehicles has raised concerns of new supply disruptions just as the automotive industry recovers from a global chip shortage.
“The sector uses semiconductors which are not always of the latest generation and therefore less sensitive to new restrictions,” finance chief Olivier Durand said on a call with journalists.
Forvia’s half-year operating profit jumped nearly 70 percent to 675 million euros, but was 2 percent below analysts’ consensus estimates, according to a research note by J.P.Morgan.
The company, born from Faurecia’s takeover of Hella, said persistent inflation on energy and labor costs continued to weigh on margins, while the impact from raw material costs should be smaller than last year.