Magna International Misses On Q3 Earnings, Plans To Resume Buybacks From Q4

Magna International MGA shares are trading higher in the premarket session on Friday.

The company reported that the third quarter adjusted earnings per share was $1.28, missing the street view of $1.41. Quarterly sales of $10.28 billion (down 4%) missed the analyst consensus estimate of $10.363 billion.

The decline in sales is primarily attributed to a 4% reduction in global light vehicle production. This includes a 6% drop in production in both North America and China, along with a 2% decrease in Europe.

“We continue to mitigate industry headwinds including lower production volumes in each of our core regions,” said Swamy Kotagiri, Magna’s Chief Executive Officer.

“As we continuously seek to optimize value creation, we are resuming share repurchases in the fourth quarter – ahead of our prior plan,” Kotagiri added.

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Adjusted EBIT decreased to $594 million, compared to $615 million in the year-ago period, reflecting reduced earnings on lower sales, higher production input costs net of customer recoveries, and lower equity income.

Sales were also affected by the end of some production programs and divestitures, though these were somewhat offset by new program launches and price increases to cover higher production costs.

The company declared a third-quarter dividend of $0.475 per common share, payable on November 29, to shareholders of record as of the close of business on November 15.

Outlook: Magna International has revised its FY24 sales outlook to a range of $42.2 billion to $43.2 billion, down from the previous outlook of $42.5 billion to $44.1 billion, while the current market estimate stands at $42.79 billion.

The adjusted net income outlook is now set at $1.45 billion to $1.55 billion, a decrease from the previous range of $1.5 billion to $1.7 billion.

Price Action: MGA shares are trading higher by 7.30% to $42.35 premarket at last check Friday.

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