TORONTO -- Intier Automotive Inc. said on Wednesday its first-quarter earnings fell short of expectations because start-up costs, slower ramp-up times for new launches and a price pressures from its customers cut into earnings.
The Newmarket, Ontario-based maker of automotive interior components and seats, one of the Magna International Inc. group of companies, reported a profit of $13.8 million, or 27 cents a share, for the period ended March 31, up from $13 million, or 25 cents a share, for the year-ago period.
The earnings lagged an average estimate of 29 cents a share among eight analysts polled by Thomson First Call.
Michael McCarthy, Intier executive vice-president and chief financial officer blamed higher start-up costs, requests from big customers to shave costs, slower-than-expected ramp-up times for some of its new project launches and a strengthening European currency versus the U.S. dollar for the weaker-than-expected earnings per share performance.
"We always want to do the best that we can. There are certainly explanations, but we are very positive for the year," McCarthy told reporters following the company's annual meeting in Toronto.
McCarthy, citing company policy, would not provide earnings per share estimates for the remainder of the year.
Sales for the period were $1.03 billion, up from $878.9 million last year, and helped higher North American and European production volumes and a strengthening Canadian dollar.
Of that total, North American sales grew to $575.6 million in the quarter, up from $521.3 million for the same time a year earlier. Average dollar content per vehicle climbed to $139 from $128.
Western European sales increased to $372.6 million during the quarter, up from $275.3 million for the same time last year. Average dollar per vehicle increased to $87 from $64.
Despite forecasted weaker North American and European production volumes, the company sees 2003 sales to be in the range of $4.35 billion and $4.45 billion, up from $3.86 billion in 2002.
But the company could see continued price pressures from the big automakers looking for price breaks, who are struggling with weaker sales caused by stiff competition and costly incentive packages.
"It's a tough industry. I don't know if it's going to get any easier, but the people who are the most efficient and the most technically capable will be the ones who will be the winners in the long term," Don Walker, president and chief executive, told reporters.
"It's as tough as I've seen it. The car companies are going to do whatever they can to try to improve their margins and we try to do whatever we can to keep ours up."