Sector Snap: Auto Parts Supplier Shares Tumble

NEW YORK (AP) — Auto parts supplier shares tumbled Monday, along with the broader market, as investors fretted about futures of the U.S. and European car markets.

Baird's David Leiker cut earnings estimates for several auto parts suppliers, citing expectations that many companies will cut production for the second half of 2009 and that other analysts will eventually be forced to cut their earnings predictions as well.

"While consensus earnings estimates for 2009 have fallen meaningfully year-to-date, the majority of the revisions have come to first-half estimates; second-half consensus estimates are flat year-to-date," Leiker wrote in a note to investors.

Leiker also cut his rating for Autoliv Inc. to "Underperform" from "Neutral." He encouraged investors to focus on Gentex Corp. and Johnson Controls Inc.

In midday trading, Autoliv shares fell $1.70, or 7 percent, to $22.70, while Gentex dropped 71 cents, or 5.9 percent, to $11.29 and Johnson Controls fell 98 cents, or 5.9 percent, to $15.70.

Deutsche Bank's Rod Lache also cut his earnings predictions for several suppliers, saying that while stimulus plans in some countries could boost European vehicle sales by as much as one million units this year, the programs will mainly pull forward sales that would have been made in 2010.