By Kannaki Deka
(Reuters) -Auto parts supplier Aptiv (NYSE:APTV) Plc lowered its annual forecasts for profit and revenue on Thursday, blaming production cuts by major automakers in Europe as the region braces for a disruption in gas supplies from Russia.
Shares of the company, which counts Stellantis NV, Volkswagen AG (OTC:VWAGY) and General Motors Co (NYSE:GM) as customers, were down 9% in early trading. Peers Borgwarner Inc, Lear (NYSE:LEA) Corp and Adient (NYSE:ADNT) Plc also fell.
Aptiv Chief Executive Kevin Clark warned about the worsening economic situation in Europe and said the company was taking several steps, including raising prices, to help protect margins.
Politicians in Europe have said Russia could cut off gas flows this winter, which could throttle industrial production in the region's top economy Germany.
Meanwhile, inflation is beginning to take a toll on the auto industry, which is still reeling from chip shortages.
Carmakers are reporting lower demand in Europe and North America amid what analysts say is growing evidence that consumers are balking at higher prices and keeping their cash for necessities.
"(Overall) we believe that constraints on production and the record levels of inflation will continue for several more quarters," Clark added.
Aptiv said it now expects full-year adjusted net income between $3.05 and $3.55 per share, down from its previous forecast of $3.90 and $4.80 per share.
It also cut 2022 revenue forecast to between $17.0 billion and $17.3 billion, down from its previous outlook of $17.75 billion to $18.15 billion.
"Q2 was horrific," Evercore analysts said in a note.
Net sales for the second-quarter were $4.06 billion, lower than analysts' expectations of $4.09 billion, as China sales fell 2%.
Excluding items, Aptiv reported a profit of 22 cents per share, falling well short of estimates of 58 cents per share, according to Refinitiv data.