Faurecia Falls on `Conservative' Forecast for 2016 Sales Growthby
Full-year growth pace forecasted lower than first quarter
French car-parts maker's shares fell the most in two months
Faurecia SA fell the most in two months after the French auto-parts maker reported sluggish first-quarter growth and stuck to its cautious outlook for the rest of the year.
Revenue in the first quarter edged up 0.1 percent to 4.66 billion euros ($5.25 billion) as currency burdens offset higher sales from its seating division in Europe. Faurecia reiterated its forecast for 2016 sales to grow between 1 percent and 3 percent, excluding foreign-exchange effects and changes to the company’s business portfolio. That would be less than the 4.4 percent gain the company posted on that basis in the first three months of the year.
On top of a “slight miss” in revenue growth, the 2016 forecast reflects the company “being conservative but also a lack of visibility beyond the second quarter,” Alexis Albert, a Paris-based analyst with Barclays, said in a note.
The French manufacturer, which is 46 percent-owned by carmaker PSA Group, struggled in China in the first quarter as local parts suppliers took more business and international carmakers reduced inventories. The company said it expects its growth in the world’s largest auto market to resume in the second quarter and accelerate in the second half as new programs for Chinese manufacturers ramp up.
The shares fell as much as 9.3 percent, the biggest intraday drop since Feb. 11, and were down 4.6 percent at 33.26 euros at 10:00 a.m. in Paris. The stock has tumbled 22 percent over the past 12 months, valuing the company at 4.6 billion euros.
On Wednesday, the company announced that it would split the roles of chairman and chief executive officer. Patrick Koller, 57, will be promoted to CEO from his current chief operating officer role on July 1. Current CEO Yann Delabriere, 65, will then become chairman. The company plans to hold an investor conference on Tuesday to update its strategy and mid-term targets.