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Magna’s Revenue Climbs 7%, but Profits Stall
Magna International Inc. says its third-quarter revenue grew to US$9.5 billion from $8.8 billion in the same period last year.
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Magna International Inc. says its third-quarter revenue grew to US$9.5 billion from $8.8 billion in the same period last year. But net income was unchanged at US$503 million, and pretax operating income slipped 3% to $670 million.
The Canadian mega-supplier says earnings were hurt by unexpected costs associated with two Getrag drivetrain factories in Europe it agreed to acquire two years ago. New-product launch costs were greater than expected at one plant, and sales were lower than anticipated at the other facility.
Third-quarter sales gains of 14% to $2.5 billion in Europe and 5% to $576 million in Asia offset a 5% decline to $4.6 billion in North America. Magna’s contract vehicle assembly business grew 55% to $781 million. Revenue from tooling and engineering services climbed 35% to $890 million.
Magna says it plans to buy back 35.8 million of its common shares over the next 12 months, beginning next week.
The company anticipates full-year sales between $38.3 billion and $39.5 billion compared with a record $36.4 billion in 2016.
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