Magna Q4 Profit Misses Estimates; Sees Growth In FY23, FY25

Canadian auto parts maker Magna International Inc. reported Friday a sharp drop in fourth-quarter profit, below market estimates, while top line increased and beat the Wall Street view. Looking ahead, the company projects higher profit and sales for fiscal 2023, and higher sales for fiscal 2025.

For fiscal 2023, the company projects net income attributable between $1.1 billion and $1.4 billion, on sales of $39.6 billion to $41.2 billion.

In fiscal 2022, the company’s net income attributable was $592 million on sales of $37.84 billion.

Sales are expected to continue to outgrow global light vehicle production through outlook period.

Adjusted EBIT Margin for 2023 is expected between 4.1 percent and 5.1 percent.

For fiscal 2025, Magna expects adjusted EBIT Margin to expand by 230 basis points or more. Adjusted EBIT Margin is expected between 6.7 percent and 7.8 percent.

Total sales by 2025 are expected to be between $44.7 billion and $47.2 billion.

Further, the company raised quarterly cash dividend to $0.46 per share. The dividend is payable on March 10 to shareholders of record as of the close of business on February 24.

In the fourth quarter, net income attributable to the company plunged to $95 million from last year’s $464 million.

Earnings per share fell to $0.33 from $1.54 a year ago. Adjusted earnings per share were $0.91, compared to prior year’s $1.30.

On average, 17 analysts polled by Thomson Reuters expected the company to earn $1.06 per share for the quarter. Analysts’ estimates typically exclude special items.

Sales, however, increased 5 percent to $9.57 billion from $9.11 billion a year ago primarily due to higher global light vehicle production. Analysts projected sales of $9.55 billion for the quarter.

Excluding foreign currency translation, sales increased 13 percent, compared to a global light vehicle production increase of 5 percent.

On a segmental basis, sales for Body Exteriors & Structures increased 11 percent to $4 billion, and sales for Power & Vision grew 8 percent to $3.02 billion.

Sales for Seating Systems increased 4 percent to $1.35 billion, while sales for Complete Vehicles decreased 12 percent to $1.33 billion.

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