Germany's Leoni the latest auto supplier to warn
Leoni AG (LEO.XE) on Monday became the latest auto supplier to cut its guidance this year, citing rising global trade tensions, stricter emissions rules and stagnating demand.
The Germany-based company said it lowered its 2018 earnings and revenue forecasts as a result of "a weaker trend in the Chinese car market, international trade conflicts" and the impact of new emissions-testing rules in Europe that hit car makers' sales over the summer.
The company now forecasts 2018 sales to rise slightly to about 5.0 billion euros ($5.76 billion) and earnings before interest and taxes to remain at the previous year's level.
Leoni's guidance cut is the latest in a series of profit warnings from European auto makers and suppliers, including French tire maker Compagnie Generale des Etablissements Michelin (ML.FR) and Mercedes-Benz maker Daimler AG (DAI.XE), both of whom cut their outlooks last week. German auto supplier Continental AG (CON.XE) issued its second profit warning in August, while competitor Schaeffler AG (SHA.XE) revised the guidance for its automotive division last month.
On the back of lower orders from European manufacturers at the end of the third quarter, Leoni said sales came in lower than expected at EUR1.2 billion euros, the same level as last year. Ebit fell to EUR38 million, compared with EUR45 million the same quarter a year ago, it said.
Free cash flow in the third quarter was minus EUR141 million compared with minus EUR35 million a year earlier.Source: Google News Germany | Netizen 24 Germany