(Reuters) -Auto parts supplier Aptiv Plc on Thursday cut its full-year profit and revenue forecast, as lockdowns in China took a bite out of quarterly results, while the industry continues to struggle with elevated freight and labor costs.
Aptiv, whose customers include Stellantis NV, Volkswagen AG and General Motors Co, indicated it may have to accelerate cost cuts to deal with near-term pressures.
“We are accelerating actions to improve profitability and enhance business resiliency in the short-term,” Chief Executive Kevin Clark said in a statement.
Analysts have been warning that the auto industry may soon begin to see the effects of soaring inflation and rising interest rates, though auto executives say demand remains unfazed, for now.
A steep rise in inflation in North America and Europe could also make it more difficult for parts makers to pass on rising costs.
Aptiv said on Thursday it expects full-year adjusted net income between $3.05 and $3.55 per share, down from its previous forecast of $3.90 and $4.80 per share.
It also cut 2022 revenue forecast to between $17.0 billion and $17.3 billion, down from its previous outlook of $17.75 billion to $18.15 billion.
Net sales for the second-quarter were $4.06 billion, lower than analysts’ expectations of $4.09 billion, as China sales fell 2%.
Excluding items, Aptiv reported a profit of 22 cents per share, falling well short of estimates of 58 cents per share, according to Refinitiv data.
(Reporting by Kannaki Deka; Editing by Shailesh Kuber)