Magna International, Inc. MGA shares are trading lower after reporting second-quarter results.
The company reported adjusted earnings per share of $1.35, which missed the street view of $1.44. Quarterly sales of $10.958 billion also missed the analyst consensus of $11.012 billion.
Sales were negatively impacted by the end of production of certain programs, lower Complete Vehicle assembly volumes, including the end of production of the BMW 5-Series, and the net weakening of foreign currencies against the U.S. dollar.
Adjusted EBIT was $577 million in the second quarter of 2024 compared to $616 million in the second quarter of 2023.
The decrease in adjusted EBIT reflects reduced earnings on lower assembly volumes in Complete Vehicles.
The company declared a second-quarter dividend of $0.475 per common share, payable on August 30 to shareholders of record as of the close of business on August 16.
In the second quarter of 2024, Magna International generated cash from operations before changes in operating assets and liabilities of $681 million and generated $55 million in operating assets and liabilities.
Outlook: Magna International has revised its FY24 sales outlook to $42.5 billion-$44.1 billion from the prior $42.6 billion-$44.2 billion, below the $43.28 billion estimate, while maintaining its adjusted net income forecast of $1.5 billion-$1.7 billion.
The company sees 2026 sales of $44.0 billion to $46.5 billion, lower than the prior view of $48.8 billion – $51.2 billion.
“Our updated 2026 Outlook reflects customer program updates and a tempered view on mid-term electric vehicle penetration rates, particularly in North America,” said Swamy Kotagiri, Chief Executive Officer.
“While we have reduced our sales forecast, we are taking a number of concrete actions to mitigate the sales impacts and continue to expect margin expansion and strong free cash flow growth.”
Price Action: MGA shares are trading lower by 6.67% to $40.14 at last check Friday.
Photo via Shutterstock
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