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Magna Boosts Profit 6% on Strong N. American Demand
Canada's Magna International Inc. netted US$343 million in the first quarter of this year compared with $322 million in the same period of 2011.
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Canada's Magna International Inc. netted US$343 million in the first quarter of this year compared with $322 million in the same period of 2011.
Revenue rose 7% to $7.7 billion in the quarter. Earnings before interest and taxes, adjusted to exclude special items, (adjusted EBIT) climbed 8% to $444 million.
Magna credits the improvements to stronger parts sales in all regions, especially North America as vehicle output jumped 17%. The company says gains were partly offset by launch costs at new plants, operating inefficiencies and price concessions.
First-quarter parts revenue grew 10% to $3.9 billion in North America, 6% to $2.3 billion in Europe and 29% to $408 million in the rest of the world. Sales of tooling and engineering dropped 7% to $422 million. Revenue from the company's Magna Steyr contract assembly unit fell 11% to $599 million because the unit's vehicle assembly volume declined 10% to 30,000 units.
By region, adjusted EBIT in the first three months of 2012 increased 5% to $405 million in North America and more than doubled to $63 million in Europe. Business in the rest of the world swung to a $9 million loss from a $14 million profit a year earlier.
Magna raised its 2012 sales outlook by $1 billion to as much as $30.5 billion. The company also boosted its forecast for North American vehicle production this year to 14.4 million units from its February prediction of 13.8 million units.
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