Forvia raises annual sales outlook on currency effects, car output

By Juliette Portala

(Reuters) -European car parts maker Forvia on Friday raised its sales guidance for the year on stronger-than-expected car output and positive currency effects, even as investors fret about the weakening outlook for the automotive market.

Born from Faurecia's takeover of German rival Hella, Forvia forecast full-year sales of between 24.5 billion and 25.5 billion euros ($23.9 billion-$24.9 billion), up from 23 billion-24 billion euros previously.

The group cited a positive currency boost of 272 million euros and higher estimates for worldwide automotive production for the uplift.

Forvia upgraded its global car production forecast by 3 million light vehicles to 77 million in 2022 - below the 79 million estimated by business information provider IHS Markit earlier this month - noting that it was remaining "cautious".

Shares in Faurecia, which also posted what some analysts said were better-than-expected quarterly sales of 6.59 billion euros, up 92.4% on a reported basis, were down 1.5% at 0928 GMT against a 1.7% drop in the wider index, having earlier fallen more than 3%.

"The company raised its 2022 guidance entirely on non-company specific items including FX," RBC Capital Markets analyst Tom Narayan said.

ODDO-BHF analysts said the "solid release" would not help Forvia as investors' concerns are more focused on the automotive market in 2023 and on Faurecia's deleveraging strategy and planned disposals.

Forvia sells seats, dashboards and fuel systems to carmakers which, after over two years of disruptions from the COVID-19 pandemic, are facing fresh supply lags due to Chinese lockdowns and Russia's invasion of Ukraine.

"The constraints are still there, but they are apparently less strong," finance chief Olivier Durand said in a media call.

($1 = 1.0240 euros)

(Reporting by Juliette Portala; Editing by Stephen Coates, Josephine Mason and Jan Harvey)