(Reuters) - Aptiv Plc (APTV.N) Chief Executive Kevin Clark said on Thursday the automotive technology supplier can increase revenues by 4% this year despite a projected 3% decline in global auto production, but worried investors sold the company’s shares.
Aptiv shares were down 2.5% on the New York Stock Exchange after the company forecast 2020 operating profits of $1.67 billion to $1.77 billion, or $4.75 to $5.05 a share, on full-year revenues of $14.5 billion to $14.9 billion. The consensus among analysts was for 2020 earnings of $5.46 a share, and revenues of $15.14 billion, according to Refintiv IBES data.
Aptiv can increase revenue and profits in a declining global vehicle market because demand for its electrification and automated driving technology is strong, Clark told Reuters.
Aptiv said bookings for its advanced driver assistance systems hit $4.2 billion for 2019 and should be $5 billion in 2020. It forecast that well over 20% of vehicles globally will be equipped with some form of electrification by 2022.
“Our long-term outlook is that vehicle production is flat to slightly up,” Clark said. Most of the growth will come from emerging markets in Southeast Asia, he said.
On Wednesday, the CEO of rival automotive supplier Robert Bosch said the world has passed the peak of automotive production for the long term.
Analysts also expressed concern about the impact of the coronavirus outbreak on Aptiv’s operations in China.
Clark said Aptiv has assigned a crisis management team to deal with the fallout from the coronavirus outbreak in China. Aptiv has 34,000 employees and 20 manufacturing facilities in China, two of them near Wuhan, the epicenter of the outbreak. Chinese authorities have extended holiday shutdowns to Feb. 9.
“The bigger question ... is what does it mean for the global supply chain,” Clark said. Aptiv and other auto manufacturers have second- and third-tier suppliers that could be disrupted by measures required to slow the spread of the virus.
Earlier on Thursday, Aptiv reported fourth-quarter net income of $1.15 a share, excluding special items, ahead of the consensus forecast.
Reporting by Joseph White; Editing by Paul Simao