TORONTO -- Intier Automotive, whose quarterly profit and sales surged on a slew of new products launched in the past year, said on Thursday its "spectacular" results will likely not be repeated next year.
The supplier, which makes interior components and seats for vehicles, anticipates slower sales growth in 2005.
"This year is pretty spectacular due to the number of launches we've had during 2003 and in the first quarter this year," chief financial officer Michael McCarthy said in a conference call.
"Our launch activity right now is not as high as it had been in the past year so I think it'll be more moderate growth."
Earlier this week, Intier said second-quarter profit nearly doubled as it benefited from car and truck products launched in late 2003 and this year. Those launches included the stow-in-floor seats for the DaimlerChrsyler minivan and seats and instrument panels for the Chevrolet Equinox.
Sales jumped 26 percent in the quarter to $1.4 billion.
The results beat estimates and sent Intier stock to nearly two-year highs on the Toronto Stock Exchange on Wednesday.
"Intier is doing a very good job in basically taking advantage of the launches that they went through last year," said UBS Securities analyst Fadi Chamoun.
"They're starting to harvest the fruit of those launches in terms of revenue growth and in terms of margin improvement."
While Intier, part of the Magna International group of companies, reiterated its sales guidance for 2004 this week, it trimmed its content per vehicle outlook at the same time.
Intier executives were reluctant on Thursday to provide substantial outlook for next year, not unusual in the auto industry, and promised more guidance in the third quarter.
Intier said it will take a $7 million to $9 million charge in the third quarter on a European facility it plans to sell.
The company expressed worries about rising steel prices and surcharges, reiterating remarks by other parts suppliers who have seen raw material costs hamper profits.
"Steel has been the biggest impact in raw materials for Intier," said chief executive Don Walker, adding the company may see costs for some chemical-based products rising over the next year as well.
Walker said Intier had expected steel prices to come down in the third and fourth quarters but that had yet to happen.
"It's an issue we've got to deal with," he said. "We had an impact in Q2.... Will it get worse? I don't know. But we're going to try and make sure we don't continue to eat everybody's steel increases and not be able to pass any along or not get any offset."