(Adds comment, detail, background)
PARIS, July 24 French car parts supplier Valeo
raised its earnings guidance on Thursday after
first-half profit rose 21 percent on an overseas expansion and
demand for fuel-saving technologies.
Net income increased to 278 million euros ($374 million) in
the six months to June 30, Valeo said, as buoyant sales in China
and North America helped offset a slide in emerging-market
Valeo now expects a 2014 operating margin above 7 percent,
an improvement on its previous pledge to match the 6.6 percent
recorded last year, it said.
A 25 percent surge in new orders "confirms once again the
company's strong organic growth potential", Chief Executive
Jacques Aschenbroich said in a statement.
Paris-based Valeo, which recently returned to France's
CAC-40 benchmark index, is well placed to benefit from
tightening emissions and safety standards as well as future
demand for self-driving cars.
Revenue rose 7 percent to 6.35 billion euros in the six
months, the company said. Operating income jumped 15 percent to
442 million euros, lifting the operating margin to 7 percent of
sales from 6.4 percent.
Progress on sales and profit came in spite of a "significant
depreciation of emerging-market currencies as well as the yen
and the dollar against the euro", Valeo said. Foreign exchange
effects reduced revenue by 3.1 percent, the company added.
The share of revenue generated outside Western Europe
nevertheless rose by a percentage point to 63 percent, with
sales to vehicle makers up 29 percent in China and 23 percent in
North America. European sales rose a more modest 4.1 percent.
($1 = 0.7427 Euros)
(Reporting by Natalie Huet and Laurence Frost; Editing by
Andrew Callus and Jane Baird)