(Reuters) - Canadian auto parts maker Magna International Inc on Thursday lowered its 2019 profit forecast, as it expects higher costs on certain programs and lower earnings from a transmission joint venture in China.
Magna said it expects net income attributable to the company to be between $1.9 billion and $2.1 billion this year, lower than an earlier estimate of $2.1 billion to $2.3 billion.
The on-going tariff war between the United States and China has hurt Magna, one of North America’s biggest auto parts maker, as the sector grapples with higher metal prices after the Trump administration imposed tariffs on steel and aluminum imports last year, triggering retaliation.
The company also sees 2019 light vehicle production of 16.7 million units in North America, lower than its earlier forecast of 17 million units.
The company missed analysts’ estimates for first-quarter profit, as sales in its biggest segment, which makes structural backbone of vehicles, fell from $4.62 billion to $4.31 billion.
Excluding items, the company earned a profit of $1.63 per share.
Analysts on an average had expected a profit of $1.71 per share, according to IBES data from Refinitiv.
Net income attributable to Magna rose to $1.11 billion, or $3.39 per share, in the first quarter ended March 31, from $660 million, or $1.83 per share, a year earlier, as it included a one-time gain of $516 million due to the sale of its fluid pressure and controls unit.
However, total sales fell nearly 2 percent to $10.59 billion, missing analysts’ estimates of $10.70 billion.
Reporting by Shradha Singh in Bengaluru; editing by Gopakumar Warrier and James Emmanuel
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