Tower International Inc. raised its full-year revenue outlook to $2.17 billion to reflect new business, favorable foreign exchange rate gains and higher steel prices.
The metal components and assemblies supplier said Tuesday that second-quarter net income rose 17 percent to $22.4 million.
Revenue advanced 13 percent to $556 million as the company benefited from outsourcing and an ongoing shift in production mix “from cars to trucks and SUVs,” Tower CEO Jim Gouin said in a statement.
Two-thirds of the supplier’s revenue is generated in North America, where the company is benefiting from steel resale programs, Gouin said Tuesday on a conference call with analysts.
“It’s pure pass-through on that portion,” Gouin said. “So they buy it, they sell it to us, we sell it back to them — zero impact.”
In Europe, which represents a third of the company’s revenue, steel prices are negotiated annually with each automaker, Gouin said.
“The part that does impact us is when we talk about the ancillary steel pieces that we have to buy, so fasteners, nuts, bolts, rivets, weld wire … and are we seeing pressure there because of the tariffs? And the answer to that question is yes,” Gouin said.
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