ZF cuts profit outlook on auto sector slowdown

FRANKFURT -- ZF Friedrichshafen on Friday cut its outlook for 2019, becoming the latest victim of a downturn in the global automotive market.

The German supplier, which in March agreed to buy U.S. rival Wabco for more than $7 billion, said falling car sales in virtually all markets, including world No. 1 China, had made the step necessary.

ZF said it now expects sales of 36 billion euros to 37 billion euros ($40 billion to $41 billion) and an adjusted earnings before interest and tax (EBIT) margin of 4 percent to 5 percent. It had previously forecast sales of 37 billion to 38 billion euros and an EBIT margin of 5 percent to 5.5 percent.

"We cannot ... detach ourselves from the challenging economic situation which we are currently facing on a global level and are falling considerably short of our targets as the downturn of the automotive markets worsens," ZF CEO Wolf-Henning Schneider said in a statement.

ZF's profit warning follows similar statements by rival Continental and luxury automaker Daimler, which last month cut its earnings expectations for the fourth time in 13 months.