(Reuters) -Aptiv beat third-quarter estimates on Thursday, on sustained demand for auto parts and supplies, but it warned of a $180 million sales hit in 2023 from the United Auto Workers (UAW) union strike against the Detroit Three automakers.
The auto parts supplier has benefited as vehicle makers doubled down on using more software and tech to power components such as modern infotainment and advanced driver aid systems.
But Aptiv during the quarter had flagged headwinds from a tight labor market and said it did not expect prices of semiconductors, a key part to modern vehicles, to cool off in the near future.
The Dublin-based company, which counts the Detroit Three automakers and Volkswagen (ETR:VOWG_p) AG as customers, supplies key electrical components and safety software for vehicles.
Aptiv has an exposure of between 8% and 9% to the Detroit Three automakers, namely General Motors (NYSE:GM), Ford Motor (NYSE:F) and Stellantis NV, according to its latest annual filings.
Analysts also fear a financial impact to the auto industry after a near six-week long strike from the UAW union hit GM, Ford and Chrysler-parent Stellantis' operations in the U.S.
GM and Stellantis have scaled back their investment plans on EVs after reaching pricey new contract agreements with the UAW. This might be a drag on suppliers such as Aptiv and Magna, which manufacture parts and components for electrified vehicles.
On an adjusted basis, Aptiv earned $1.30 per share compared with LSEG estimates of $1.23 per share.
Net sales in the quarter ended Sept. 30 rose 11% to $5.1 billion. Analysts on average expected $5.09 billion.
Aptiv retained its full-year sales target of $19.95 billion to $20.25 billion, despite the UAW strike hit.