Canadian automotive parts manufacturer Martinrea (MRE.TO) said it will take a $90 million sales hit as a result of the prolonged General Motors strike in the United States.
The Vaughan, Ont.-based company, which reported financial results for the three-month period ending Sept. 30 after the markets closed Tuesday, said it lost approximately $20 million in sales in September and $70 million in October due to the GM strike. GM, which reached a deal with its striking employees last month, is Martinrea’s largest customer.
The impact of the strike will be particularly felt in the next quarter, the company said.
“For our fourth quarter, we will experience the impact on sales, margins and earnings of some volume decreases, primarily because of the GM strike, which eventually affected the entire month of October,” chief financial officer Fred Di Tosto said in a statement released Tuesday.
Still, the company was able to offset the impact of the strike in the third quarter and saw sales increase from $851.1 million last year to $974.4 million, an increase of 14.5 per cent. Martinrea also reported a net income of $46.7 million, up 28.3 per cent from $36.4 million at the same time last year.
“Overall, the strike affected sales and earnings in the quarter, but positively, we experienced solid financial and operating performance,” chief executive Pat D’Eramo said in a statement released late Tuesday.
The results come a few days after Canada’s largest auto parts manufacturer lowered its full-year financial outlook as the strike, as well as lower global vehicle production, dragged sales down. Magna International (MG.TO), which reports in U.S. dollars, saw sales fall three per cent, or $299 million, to $9.32 billion in the three month-period ending Sept. 30.
Magna also said it now expects its full-year sales to be between $38.7 billion and $39.8 billion, down from its earlier expectations of between $38.9 billion and $41.1 billion. The company expects its net profit range to be between $1.8 billion and $1.9 billion, down from between $1.9 billion and $2.1 billion.
At the same time, Linamar (LNR.TO), Canada’s second largest auto parts manufacturer, said the strike was costing the company as much as $1 million per day.