Auto technology supplier Aptiv Plc APTV.N forecast better than expected results for the year on Thursday and gave a bullish outlook for growth for its electrification and assisted driving technology, lifting its shares as much as 4%.
in Reuters, 29-10-2020
Chief Executive Kevin Clark said sales of high voltage electrification technology were growing by 40% a year as automakers respond to demand for cleaner, all or partially electric vehicles.
“This year we have seen a real change in trajectory” for vehicle electrification,” Clark told Reuters. Automakers that had held back from developing electric or plug-in hybrid vehicles are now responding to the success of electric vehicle maker Tesla IncTSLA.O.
China, the world’s largest auto market, will be the largest electric vehicle market, Clark said. Aptiv expects half the vehicles in China will be battery electric or high-voltage hybrids by 2025, up from 9% today.
At the same time, Clark said Aptiv expects strong growth in sales of its assisted driving technology over the next five years.
Aptiv, which counts General Motors Co GM.N and Volkswagen AG VOWG_p.DE among its biggest customers, said it expects net sales to be between $12.5 billion and $12.7 billion in 2020, above analysts’ estimate of $12.3 billion.
Sales in the signal and power components unit, which is the company’s biggest business, making connectors, wiring assemblies and electrical power and signal distribution systems for cars, rose about 3% to $2.65 billion in the third quarter.
Net sales rose about 3% to $3.7 billion.
Sales growth in Europe, Asia and China was offset by a dip of 3% in North America.
Adjusted net income attributable to Aptiv dipped to $320 million, or $1.13 per share in the quarter ended Sept. 30, from $325 million, or $1.27 per share, a year earlier.
Aptiv reported spending $30 million in the third quarter on coronavirus-related safety measures within its operations – a cost that will likely continue “well into next year,” Clark said. Aptiv also faces costs related to labor shortages and other disruptions within its own global supply network, he said.