Breaking News

UPDATE 2-Automobile elements maker Magna cuts revenue forecast as chip crunch weighs

(Adds estimates qualifications on chip shortage, Veoneer deal)

Aug 6 (Reuters) – Magna Worldwide Inc, whose bid for Swedish rival Veoneer was trumped by chipmaker Qualcomm, slice its comprehensive-calendar year revenue forecast on Friday, citing a slowdown in vehicle creation as a semiconductor shortage plagues the sector.

Chip scarcity has hampered automobile creation around the environment, bringing some assembly strains to a halt, with automakers warning the chip lack could extend, even as motor vehicle demand booms in markets which includes the United States.

“The next quarter of 2021 integrated the creation disruptions because of to the ongoing global semiconductor chip shortage,” Magna reported in a statement.

The world-wide semiconductor chip scarcity will price automakers $110 billion in profits this year, according to consulting organization AlixPartners.

Car elements provider Aptiv Plc explained the preceding working day it expects larger costs due to pandemic-related source chain problems to spill into the future 12 months.

Chipmaker Qualcomm Inc explained on Thursday it experienced supplied to invest in Veoneer Inc for $4.6 billion, an 18.4% premium to a bid in July by Canada’s Magna International Inc that was accepted by Veoneer’s board.

Veoneer has mentioned its board would appraise the proposal from Qualcomm and the terms of the Magna merger agreement.

Magna’s revenue for the calendar year is now predicted to be amongst $38 billion and $39.5 billion, when compared with a former forecast of $40.2 billion to $41.8 billion.

Magna reported net income attributable of $424 million, or $1.40 for each share, in the quarter ended June 30, in contrast to a reduction of $647 million, or $2.17 for each share, a yr previously.

Analysts on average envisioned the business to earn $1.38 per share, according to Refinitv information.

Total income more than doubled to $9.03 billion, but skipped estimates of $9.29 billion.

Reporting by Sanjana Shivdas in Bengaluru Modifying by Saumyadeb Chakrabarty and Vinay Dwivedi

Exit mobile version