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TORONTO, April 22 (Reuters) - Wescast Industries Inc. reported a narrower first-quarter profit on Tuesday, because of higher income taxes and costs at new facilities, and remained cautious on the outlook for the industry over the next few months.
Wescast, the world's No. 1 manufacturer of exhaust manifolds for cars and light trucks, said net earnings were C$10.7 million ($7.4 million), or 76 Canadian cents a share, down from C$18.5 million, or C$1.39 a share, for the same period last year.
Revenue at the Brantford, Ontario-based company rose 19 percent to C$125.2 million, from C$104.9 million in the year-earlier quarter.
North American vehicle sales have slowed after a torrid 2002, when revenues were boosted by low-interest dealer financings and other lucrative incentives.
The company warned last quarter that 2003 sales and earnings were likely to be hurt by its acquisitions of Georgia Ductile, a U.S.-based chassis manufacturer, and of a stake in the Weslin manifold operation in Hungary. Neither operation is expected to be profitable in the coming year.
Falling just short of offering guidance for the rest of the year, the company said in a release that "a lot of uncertainty exists around the short-term economic outlook for the automotive industry," noting that a number of events will have an impact on the industry in the months ahead.
The company also doubted whether previously reported industry targets for North American light vehicle production for 2003 of 15.5 million to 16.0 million vehicles was obtainable.
Wescast's thinly traded shares were up 15 Canadian cents to C$36.50 on the Toronto Stock Exchange on Tuesday. Volume was a light 1,025 shares.
The stock has lost about one-third of its value over the past year, moving in line with Canadian auto-parts giant Magna International .
The company noted that the stock lost value during the quarter as a result of "stock appreciation rights granted under the company's stock-option program."
($1=$1.45 Canadian)