Magna International Inc. (MGA) projected higher sales and production volume for 2013 based on its expansion in the high-growth markets and strong position in North America and Europe. The company expects the restructuring actions in Europe will lead to further improvement in its European financial results.
Revenues are expected between $31.3 billion and $32.7 billion for 2013 with light vehicle production of 15.3 million units in North America and 12.0 million units in Western Europe.
Revenues from External Production Sales (comprising North America, Europe and Rest of the World) are expected between $26.5 billion and $27.5 billion in 2013. Revenues are expected between $15.3 billion and $15.7 billion in North America, $9.0 billion and $9.3 billion in Europe and $2.2 billion and $2.5 billion in ROW. Revenues from the Complete Vehicle Assembly segment are anticipated between $2.5 billion and $2.8 billion.
The company expects operating margin to be 5% for 2013 with tax rate of 24.5%. The company also projected capital spending of $1.4 billion for the year.
Moreover, Magna expects total production sales to increase by $2.2 billion from 2013 to 2015 based on a light vehicle production of 16.7 million units in North America and 12.8 million units in Western Europe. The increase in production sales will be attributable to 70% improvement in North America and 40% rise in Rest of World, which will be partially offset by a 10% decline in Europe.
Magna reported adjusted earnings per share of $1.13 in the third quarter of 2012, up 20.2% from 94 cents in the year-ago quarter. The results topped the Zacks Consensus Estimate by 10 cents. The year-over-year growth in earnings was aided by a decline in share count stemming from repurchase and cancellation of common stocks during the quarter.
Revenues climbed 6.3% year over year to $7.4 billion, exceeding the Zacks Consensus Estimate of $7 billion. The increase was driven by improvement in North American and Rest of World (:ROW) production sales and higher tooling, engineering and other sales, partly offset by decline in sales from European business and Complete Vehicle Assembly.
Magna International, based in Aurora, Canada, is a leading manufacturer and supplier of automotive components. The company designs, develops and manufactures automotive systems, assemblies, modules and components, besides engineering and assembling complete vehicles, primarily for sale to original equipment manufacturers (OEMs) of cars and light trucks.
Magna’s primary competitors include Dana Holding Corporation (DAN). Currently, the company retains a Zacks Rank #3 (Hold).
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