October 25, 2018 / 4:14 PM / 9 months ago

Car parts maker Valeo issues new warning on emissions clampdown and China slump

PARIS, Oct 25 (Reuters) - French auto parts maker Valeo slashed its full-year sales and earnings goal, blaming industry disruption from the introduction of tougher European emissions tests and a sharp sales downturn in China.

In its second profit warning in three months, Valeo cut its revenue growth target to 6 percent from 9 percent at constant exchange rates.

It also cut its operating margin target to 6.2-6.5 percent - having earlier predicted profitability “slightly below” last year’s 7.8 percent.

The impact of new “WLTP” tests, which have hit major carmakers’ sales and production, will “continue into the fourth quarter”, warned Valeo Chief Executive Jacques Aschenbroich.

The supplier posted 4.5 billion euros ($5.1 billion) in third-quarter revenue, up 5 percent at constant exchange rages.

It also trimmed its 2018 free cash flow goal to 120-150 million euros from 278 million.

$1 = 0.8794 euros Reporting by Laurence Frost; Editing by Sudip Kar-Gupta

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