Magna International (MG.TO), a Canadian supplier of car components, increased its 2023 profit estimate on Friday but noted the impact of the United car Workers (UAW) union strike in North America.
Because automakers all over the world are racing to release safer cars with more sophisticated driver-aid systems and greater efficiency, suppliers have profited from an increase in demand for their auto components, software, and equipment.
However, after the UAW’s almost six-week-long strike closed down operations at the Detroit Three automakers, General Motors (GM.N.), Ford Motor (F.N), and Stellantis NV (STLAM.MI), analysts predict that car component manufacturers will feel the heat.
Magna, which has a 13%–15% exposure to Stellantis, the parent company of GM, Ford, and Chrysler, stated that the UAW strikes impacted sure of its customers, but it did not elaborate.
Even while Peer Aptiv (APTV.N) exceeded quarterly projections on Thursday, it also cautioned of a $180 million impact to its full-year sales from the UAW strikes.
Magna revised its previous prediction range of $1.4 billion to $1.6 billion to expect a full-year adjusted profit between $1.55 billion and $1.65 billion.
The business kept its previous prediction assumption for North America but increased it for light car production in China and Europe.
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