May 5, 2020 / 12:08 PM / 25 days ago

Aptiv warns of second-quarter loss as pandemic hits vehicle production

(Reuters) - U.S. auto parts maker Aptiv Plc (APTV.N) on Tuesday reported a smaller-than-expected decline in profit in the first quarter, but executives warned of a second-quarter loss due to coronavirus-driven auto production cuts.

The maker of assisted driving and automotive electrical systems said global auto production in the second quarter is on track to drop by more than 50%.

Aptiv Chief Financial Officer Joseph Massaro said in call with investors that the company expects a second-quarter pre-tax loss of $150 million to $200 million. The company said it expects full-year global auto production to be down 20% to 30% from last year.

Aptiv, which counts General Motors Co (GM.N) and Volkswagen AG (VOWG_p.DE) among its biggest customers, withdrew its full-year outlook, citing disruption in the automotive industry caused by the COVID-19 pandemic.

“The current economic environment remains highly uncertain and the impacts of the COVID-19 pandemic are increasingly reducing visibility into when customers’ plants will be fully operational,” Aptiv said in a statement.

Sales in the signal and power components unit, which is Aptiv’s biggest business and makes connectors, wiring assemblies and electrical power and signal distribution systems for cars, fell about 9% to $2.33 billion in the first quarter ended March 31.

Sales in the smaller advanced safety and user experience business, which makes automotive sensing and perception systems, declined about 12% to $902 million.

Adjusted net income attributable to Aptiv fell to $173 million, or 68 cents per share, from $273 million, or $1.05 per share, a year earlier.

Net sales declined about 10% to $3.23 billion.

Analysts, on average, expected Aptiv to report a first-quarter profit of 35 cents per share on revenue of $3.01 billion, according to IBES data from Refinitiv.

Aptiv’s organic revenue decline of just 7% in the first quarter is better than the 23% slump in global light vehicle production during the same period, J.P. Morgan analyst Ryan Brinkman wrote in a note.

Reporting by Ankit Ajmera in Bengaluru; Editing by Devika Syamnath, Krishna Chandra Eluri and Paul Simao

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