Forvia shares jump as Q3 sales beat expectations, FY24 guidance reaffirmed

Investing.com — Shares of automotive supplier Forvia (EPA:FRVIA) jumped on Monday after the company reported slightly better-than-expected sales for the third quarter, with analysts at UBS noting encouraging trends in key areas. 

At 4:51 am (0851 GMT), Forvia was trading 9.1% higher at €8.690.

Forvia’s third quarter revenue reached €6.36 billion, reflecting a 0.4% like-for-like decline year-on-year, which was marginally above market expectations. 

Strong performances in its Interiors and Seating divisions, with 6% and 5% like-for-like growth respectively, helped offset weaknesses in other areas.

Its European sales grew by 4%, outpacing industry production by 4.2 percentage points.

However, Forvia’s Clean Mobility division struggled, with third quarter sales falling 10%, driven by weak demand from Stellantis (NYSE:STLA) in North America and Europe. 

The company also faced headwinds in China, where sales underperformed by 11 percentage points due to a high base effect and delayed new product launches. 

Despite this, Forvia remains optimistic about its future in China, forecasting market outperformance of more than 300 basis points in 2025, bolstered by new contracts with Chery and other upcoming launches.

Forvia confirmed its previously revised full-year guidance, with expected FY24 sales between €26.8 billion and €27.2 billion and an EBIT margin of 5% to 5.3%, in line with consensus estimates. 

The company also mentioned its plans to reduce capital expenditures in 2025 and continues to work towards its €1 billion asset disposal program, with €750 million remaining to be completed by the second half of 2025.

“At this stage, this appears realistic to us, and we would not expect much change to FY24 consensus,” said analysts at UBS in a note.