Magna profit rises on strong sales growth
TORONTO -- Magna International Inc. posted a big jump in quarterly earnings on Thursday as vehicle production soared in North America.
Magna said fourth-quarter profit rose to $312 million, compared with earnings of $224 million in the year-before quarter.
Sales at North America's largest auto parts maker rose 13 percent to $7.25 billion during the quarter, boosting revenue for all of 2011 to $28.7 billion from $23.5 billion in 2010.
Vehicle production increased 15 percent in North America from the year-before quarter, but declined 4 percent in Europe.
Adjusted earnings before interest and taxes rose 28 percent in the quarter to $321 million, buoyed by a 22 percent increase in profit at the company’s North American unit.
On that basis, Magna’s European unit posted a loss of $3 million, compared with a profit of $20 million a year earlier.
Improvements in European operations and the launch of new facilities around the world remains a focus for 2012, the company said.
“Europe was a disappointment in 2011,” Chief Executive Officer Don Walker told analysts on a conference call.
Still, fourth-quarter results showed an improvement from the previous three months, “and we expect further improvement through 2012,” he said.
The company forecast sales of $28 billion to $29.5 billion this year.
Magna expects the auto-parts industry to continue to consolidate in the long term as carmakers expand globally, Walker said.
The company is “looking at a number of different things, no more or less than we have traditionally been looking at, but there are a lot of opportunities out there,” Walker said. “I suspect we will continue to make some acquisitions.”
He didn’t elaborate.
Magna also raised its dividend to 27.5 cents a share from 25 cents. It is the first increase in the supplier's dividend since February 2011.
Reuters and Bloomberg contributed to this reportContact Automotive News