11:33 AM EDT, 10/04/2024 (MT Newswires) -- US auto suppliers are largely expected to miss Wall Street's revenue estimates for the third quarter, with a few projected to slightly outperform on margins, Deutsche Bank said in a note emailed Friday.

Aptiv ( APTV ) is among the auto suppliers that are at risk of missing revenue expectations, the brokerage said. However, the company's earnings in the quarter could outperform amid strong flow-through of operating performance.

Autoliv ( ALV ) , Lear (LEA) and Dana (DAN) could also trail top-line estimates for the third quarter, Deutsche Bank analyst Edison Yu wrote.

Automotive seating and electrical systems company Lear said in July that it expected 2024 net sales to range between $23.23 billion and $23.67 billion, compared with $24 billion to $24.6 billion previously anticipated. The same month, Autoliv ( ALV ) Chief Executive Mikael Bratt told analysts on an earnings call that the North America light vehicle production outlook was revised down 3.4% over the short term "on the need for a greater inventory correction."

"With Lear's guide-down on its top-line and margin for (the third quarter) and Autoliv ( ALV ) signaling some weakness due to (North) America volume and timing of recoveries, we expect broad-based top-line misses from suppliers," Yu wrote. "And some that could still meet margin expectations thanks to cost actions."

European original equipment manufacturers have issued profit warnings for the second half, citing headwinds from China, inventory buildup in North America and flooding in eastern Europe, according to the note. Deutsche Bank said inventory problems in North America are mostly isolated to Stellantis ( STLA ) , the parent company of Chrysler and Jeep.

Late last month, Stellantis ( STLA ) cut its full-year adjusted operating income margin and free cash flow projections amid deteriorating global industry trends.

Adient (ADNT), American Axle & Manufacturing ( AXL ) , BorgWarner ( BWA ) and Visteon ( VC ) could meet third-quarter estimates, Yu said.

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