February 22, 2018 / 4:52 PM / a year ago

Valeo profit falls on tax charge, R&D push

PARIS, Feb 22 (Reuters) - French auto parts maker Valeo said profit fell in the second half as it weathered adverse exchange rates and raw material prices, invested more in future vehicle technologies and took a one-off charge related to U.S. tax cuts.

Net income dropped 24 percent to 380 million euros ($468.20 million) in July-December, the Paris based company said, on an 8 percent increase in group revenue to 9.09 billion.

“These results were achieved in a more complex economic environment, linked in particular to a higher euro and raw materials,” Chief Executive Jacques Aschenbroich said in the company statement.

Operating income rose 5 percent to 723 million euros, for an 8 percent operating margin, down from 8.2 percent a year earlier.

The results missed analyst expectations of 9.24 billion euros in revenue, 760 million in operating income and 499 million in net profit, based on the median estimates in an Inquiry Financial poll for Reuters.

Research and development spending rose 16 percent to 548 million euros as Valeo expanded its electric and autonomous vehicle technology programmes.

The company said it was targeting 8 percent revenue growth this year, with an operating margin close to its 2017 level of 7.8 percent before equity contributions. ($1 = 0.8116 euros) (Reporting by Laurence Frost)

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