Delphi, BorgWarner fall after trimming annual profit outlooks
Delphi Automotive Plc fell the most in two months after the autoparts supplier cut its annual profit and sales forecasts to below analysts’ estimates as China’s vehicle market slows.
The shares declined 6.8 percent to $80.31 at 11:57 a.m. in New York after sliding as much as 7.2 percent for the biggest intraday drop since Aug. 24. Through Wednesday, the stock had risen 18 percent this year.
Delphi said it expects profit of $5.15 to $5.25 a share, down from its earlier outlook of as much as $5.40. The average of estimates compiled by Bloomberg was $5.30. The company also trimmed its sales forecast to as much as $15.1 billion from $15.6 billion. The average projection was $15.3 billion.
The revisions are probably tied to slowness in Delphi’s sales in China, said David Leiker, an analyst at R.W. Baird & Co. who rates the shares outperform. Delphi said on a conference call that the Chinese market is weaker than it was when the company reported second-quarter results.
The former autoparts unit of General Motors has been trying to reduce its dependency on the U.S. market since exiting bankruptcy in 2009. Delphi got about 23 percent of sales last year from the Asia-Pacific region, up from 16 percent in 2010.
BorgWarner Inc., another autoparts maker that reported quarterly earnings Thursday, said profit this year will be $2.95 to $3 a share, down from its earlier forecast of $2.95 to $3.10. Analysts estimated $2.98 on average. The company didn’t give a reason in its statement. Baird’s Leiker, who rates the shares neutral, tied the decline to a slowdown in the market for heavy construction vehicles, which BorgWarner supplies.
The company’s shares fell 6.7 percent to $42.47 after dropping as much as 8.5 percent for their biggest intraday decline since Sept. 22. They fell 17 percent this year through Wednesday.
The shares of Oshkosh Corp. also declined after the maker of commercial and military vehicles said fiscal 2016 profit will be $3 to $3.40 a share. The average analyst estimate was $3.45. Oshkosh cited a “more cautious outlook for our access equipment and concrete mixer businesses” and said it expects those businesses to improve as the construction season picks up next year.
The stock fell 7.2 percent to $39.70 after sliding as much as 10 percent for the biggest intraday decline since Aug. 24. The shares dropped 12 percent this year through Wednesday.