Magna raises 2023 profit forecast, flags impact from UAW strikes

(Reuters) – Canadian auto parts supplier Magna International (NYSE:) raised its 2023 profit forecast on Friday, but flagged an impact from the United Auto Workers (UAW) union strike in North America.

Suppliers have benefited from an uptick in demand for their auto parts, software and tech as vehicle makers around the globe rush to push out safer vehicles with advanced driver-aid systems and higher efficiencies.

But analysts expect auto parts makers to feel the heat after the UAW’s near six-week long strike shut operations at the Detroit Three automakers — General Motors (NYSE:), Ford Motor (NYSE:) and Stellantis NV (NYSE:).

Magna, which has an exposure of 13%-15% to GM, Ford and Chrysler-parent Stellantis, said its outlook reflected an impact from the UAW strikes at certain customers, but did not provide further detail.

Peer Aptiv (NYSE:) also warned of a $180 million hit to its full-year sales from the UAW strikes, even as it topped quarterly estimates on Thursday.

Magna expects full-year adjusted profit to be between $1.55 billion and $1.65 billion, compared with its prior forecast range of $1.4 billion to $1.6 billion.

The company also raised its forecast assumption for light vehicle production in Europe and China but retained its prior assumption for North America.