Delphi, BorgWarner Fall After Trimming Profit Outlooks

  • Delphi lowers forecast as its China sales slow, analyst says
  • Oshkosh also declines, citing construction-related equipment

Delphi Automotive Plc fell the most since the shares began trading in 2011 after the auto-parts supplier cut its annual profit and sales forecasts to below analysts’ estimates as China’s vehicle market slows.

The shares declined 7.1 percent to $80.04 at the close in New York for the biggest daily drop since Nov. 17, 2011. The stock has risen 10 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 auto-parts 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, Oshkosh

BorgWarner Inc., another auto-parts 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. BorgWarner on its conference call cited slowing sales, mainly in China.

The company’s shares slid 8.7 percent to $41.57, their biggest decline since January 2009. They have fallen 24 percent this year.

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 9.6 percent to $38.68, the steepest one-day decline since July 2014. The shares have dropped 20 percent this year.

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