Faurecia Lowers Earnings Outlook on Slowing Car Sales in Europe
Faurecia (EO), Europe’s largest maker of car interiors, cut its 2012 earnings outlook, saying it expects a sharp sales decline in Europe in the fourth quarter as a result of an amplification in slowing automobile production.
Sales advanced to 4.09 billion euros ($5.34 billion) from 3.79 billion euros a year earlier, the Paris-based company said in a statement e-mailed today. Faurecia now expects 2012 operating income “above 500 million euros” for 2012, compared with earnings of 560 million euros to 610 million euros as forecast in July.
“Despite the increased contribution of other regions and already significant cost adjustments, lower sales in Europe will affect the Group’s profitability in the fourth quarter,” the company said in a statement.
Faurecia, which is 57 percent-owned by French troubled carmaker PSA Peugeot Citroen, seeks to expand its activities outside Europe as the continent’s car market is heading for fifth straight annual decline, with Peugeot, Fiat SpA (F) and Renault SA (RNO) leading the drop.
Moody’s Investors Service cut its outlook on Faurecia was cut to stable from positive on July 27. The ratings company views the auto supplier’s relationship with majority sharholder Peugeot primarly as an operating challenge, but believes that it can largely compensate shorfalls of sales to Peugeot by business from other carmakers.
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