October 26, 2018 / 7:17 AM / a year ago

Shares in car parts group Valeo slump after profit warning

PARIS, Oct 26 (Reuters) - Valeo shares slumped on Friday, after the car parts company slashed its sales and earnings goal, blaming industry disruption from the introduction of tougher European emissions tests and a sharp sales downturn in China.

Valeo shares fell 15.7 percent in early session trading, dragging down the shares of its French peer Faurecia, with Faurecia also down by around 8 percent.

Valeo said late on Thursday that it had decided to cut its 2018 revenue growth target to 6 percent from 9 percent at constant exchange rates.

Valeo also reduced its operating margin goal to 6.2-6.5 percent - having earlier predicted profitability “slightly below” last year’s 7.8 percent - and cut its free cash flow objective to 120-150 million euros ($136-$171 million) from 278 million. (Reporting by Sudip Kar-Gupta; Editing by Mathieu Rosemain)

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