Decoma International reported that its third-quarter profit fell due to lower production volumes and to costs related to new plants, according to a Reuters report.
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Decoma, of Concord, Ontario, makes exterior car parts such as plastic bumpers and body panels and is controlled by automotive parts company Magna International, the report noted.
According to Reuters, Decoma said profit was $US14.8 million, or 16 cents a share, in the quarter, down from a profit of $18.6 million, or 21 cents a share, in the year-earlier period.
That was lower than the consensus estimate of seven analysts polled by Reuters Research of a profit of 17 cents a share.
Although overall production volumes were lower in the third quarter, Decoma reportedly said acquisitions helped boost sales and content per vehicle – average content per vehicle rose 16% to $94 in North America and 24% to $42 in Europe.
Sales for the quarter rose to $556.4 million from $465.5 million in the same period last year, Reuters said.
The news agency noted that translation of Canadian dollar sales into US dollars helped boost Decoma’s sales and content-growth figures in North America as the Canadian dollar has strengthened this year and the company reports in US dollars.
In Europe, sales and content growth were boosted by plants that were acquired at the end of 2002 and early 2003, Reuters said, adding that costs associated with plant start-ups, new programmes and takeover contracts cut into third-quarter profits.
Operating income for the quarter dropped to $28.9 million from $36.1 million in the same period last year while, during the quarter, vehicle production shrank 3% in North America and remained the same in Europe, Reuters added.
According to the news agency report, Decoma’s outlook for 2003 remains unchanged from previous forecasts for a 2% decline in production volumes for light vehicles in both North America and Europe while it expects per-vehicle content of between $90 to $92 in North America and between $39 to $41 in Europe.
The company said it expects 2003 year sales of $2.27 billion to $2.36 billion and profit of 92 cents to $1.04 a share, Reuters added.
