Magna 3Q Profit Slumps 62% On Charges; Below Expectations
November 03 2011 - 12:25PM
Dow Jones News
Magna International Inc.'s (MGA, MG.T) third-quarter earnings
slumped 62% and fell short of analyst expectations, hurt by
expenses related to the sale of an automobile interiors operation
and costs related to the settlement of certain claims.
Sales for the big North American auto-parts maker were up 21%,
with complete vehicle assembly sales up 28% to $663 million and
volume up 55% to about 32,000 units. The company assembles autos
for
Magna said vehicle production was up 4% in Western Europe during
the quarter and 8% in North America.
Separately, auto parts supplier Visteon Corp. (VC) swung to a
third-quarter profit of $41 million, or 79 cents a share, compared
to a loss of $140 million, or $1.08 a share, a year ago. The Van
Buren Township, Mich., company attributed the gain to higher sales
and favorable currency exchange rates.
Sales for the former Ford Motor Co. (F) spin-off rose 19.7% to
$2.04 billion from $1.70 billion a year ago.
In mid-day trading on the New York Stock Exchange, Magna shares
were off 3.7% at $34.11 while Visteon's were up 3.7% at $57.43.
Aurora, Ontario-based Magna reported earnings of $102 million,
or 42 cents a share, in its latest quarter, down from $266 million,
or $1.14 a year earlier. Magna said the sale of an auto-interiors
unit and settlement costs reduced earnings in the latest quarter by
52 cents a share. Analysts polled by Thomson Reuters had projected
a third-quarter profit of 98 cents a share.
Sales rose 21% to $6.97 billion from $5.78 billion, beating the
Thomson Reuters mean estimate of $6.75 billion.
In its second quarter, Magna also posted lower earnings, which
fell well short of analyst expectations on higher costs and
execution problems in Europe.
For 2011, Magna forecast sales of between $28.1 billion and
$28.9 billion, compared with its previous projection of between
$27.5 billion and $28.9 billion. It's projecting complete vehicle
assembly sales of between $2.6 billion and $2.8 billion.
Magna also announced plans to buy back up to 12 million of its
shares in a buyback program expected to start on about Nov. 11.
-By Judy McKinnon, Dow Jones Newswires; 1-416-306-2100,
judy.mckinnon@dowjones.com
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