Canadian factory automation systems company ATS saw a drop in its shares on Wednesday morning, as the company raised concerns about the impact of market volatility on its order bookings.
At 10:08 a.m. ET, shares dropped 5.4% to 55.75 Canadian dollars (41.32).
ATS acknowledged that inflationary pressures were affecting discretionary spending, leading some customers to exercise caution when it comes to investment and spending across all markets. As a result, the timing of customer investments may be delayed.
Specifically, ATS highlighted the transportation segment as an area of concern. The company mentioned that while electric vehicle programs can lead to larger average order values, they also introduce variability in order bookings.
“The near-term market for electric vehicles remains dynamic as automotive Original Equipment Manufacturers look to align capacity to end-market demand and lower platform costs,” ATS stated.
In the third fiscal quarter, order bookings decreased by nearly 32% to C$668 million, and order backlog fell by 11% to $1.91 billion.
Despite these declines, ATS expressed optimism that the order backlog would help offset some of the negative effects of quarterly variability on its revenues in the short-term.
Looking ahead to the fourth fiscal quarter, ATS anticipated converting approximately 36% to 39% of the order backlog to revenue.