Magna posts 24% rise in profit, takes control of E-Car
TORONTO (Reuters) -- Magna International Inc. reported a 24-percent jump in quarterly profit on Thursday and said it was buying the controlling, minority stake in its electric car business.
The company's second-quarter earnings rose to $349 million compared with profit of $282 million in the same period last year.
Magna, which makes parts for major auto manufacturers and assembles complete vehicles, said revenue increased to $7.7 billion from $7.3 billion in the period ended June.
Magna said it will acquire the controlling 27-percent partnership interest of Magna E-Car Systems for $74.67 million from a company affiliated with founder Frank Stronach. Magna currently owns the remaining 73 percent non-controlling stake.
"We are pleased to regain control of Magna E-Car's assets and business," said Magna CEO Don Walker. "We expect hybrid and electric vehicle production to continue to grow globally in the future and we believe that Magna stands to benefit from this trend by supplying ... components, systems and engineering
services to our customers."
The company also modestly revised its 2012 operating margin to the "low to mid 5 percent range", from its previous forecast in the "low 5 percent range." It maintained its total sales outlook of between $29 billion and $30.5 billion.
Magna said its complete vehicle assembly sales fell 11 percent to $645 million in the quarter, while volumes were down 6 percent to approximately 33,000 units.
Industry-wide, it said vehicle production increased 28 percent in North America from the year-ago quarter, while declining 7 percent in Europe.Contact Automotive News