PARIS -- Valeo SA had a 4.1 percent higher operating income of 77 million euros ($92.25 million) in the third quarter, beating analysts' expectations for some 65.2 million.
The maker of parts such as clutches, windshield wipers and parking gadgets said on Thursday its third-quarter sales were up 10.8 percent at 2.356 billion, against analysts' expectations for 2.34 billion euros.
Valeo said that for the fourth quarter, it anticipated a slight increase in automobile production in Europe, driven by a production ramp-up in Eastern Europe, and a fall in production levels of the Big 3 in North America of around 2 percent. It said it aimed to strengthen its market share in an environment of ongoing raw material price rises.
Valeo said its operating margin was 3.3 percent of sales, also ahead of estimates, but still below the second-quarter's 3.6 percent.
Its total operating revenues were up 0.5 percent once the effects of exchange rates and acquisitions were stripped out.
It said car production was estimated to have fallen by 4 percent in Europe and increased by 3 percent in North America, including a 1 percent Big 3 decline, while it rose by 9 percent in South America and 8 percent in Asia.
The spike in raw materials would have shaved one percentage point from the gross margin, at 15.7 percent of sales, but Valeo said unspecified actions had limited the impact to 0.6 points.
At the end of September 2005, net debt was 1.14 billion euros, down 122 million euros from June, reflecting a share buyback program and acquisitions. The debt-to-equity ratio was 67 percent, down 6 points as compared with the end of June 2005.
Net income was 30 million, down from 38 million, due to doubled interest expenses of 16 million.