Magna expects emerging markets to boost 2013 sales
TORONTO (Reuters) -- Diversified auto parts supplier Magna International Inc. forecast stronger 2013 sales and profit margins, reflecting gains from fast-growth markets such as China and Brazil.
Magna, the largest Canada-based supplier with 286 plants in 26 countries, has pushed expansion outside its core markets of North America and Europe to take advantage of lower operating costs and stronger demand.
"Our outlook reflects the progress we are making in expanding Magna's business outside of out traditional markets," CEO Don Walker said in a statement.
For 2013, the company sees sales of $31.3 billion to $32.7 billion, above its forecast for 2012 full-year sales of $30.3 billion to $31.2 billion. Analysts expect 2013 sales of $31.87 billion, on average, according to Thomson Reuters I/B/E/S. Magna estimates production sales growth of $2.2 billion between 2013 and 2015.
The company also said the U.S. Department of Justice has ended an antitrust investigation without taking any action. The probe related to its auto tooling sales.
The company, which competes with Johnson Controls Inc. and TRW Automotive Holding Corp., sees its 2013 operating margin in the mid-5 percent range.
Total production sales in 2013 are estimated at $26.5 billion to $27.5 billion, above a 2012 forecast of $25.5 billion to $26.1 billion. Production sales are Magna's core business of manufacturing vehicle parts and exclude its smaller vehicle assembly and tooling operations.
Capital spending in 2013 is expected to remain flat, at about $1.4 billion this year.
Magna said it expects 2015 light vehicle production volumes of about 16.7 million units in North America and 12.8 million units in western Europe.
An anticipated 70 percent increase in North American production sales and 40 percent climb in the rest of world will be offset by a 10 percent decline in Europe, the company said. Magna, which has been trying to turn around European operations after a string of money-losing quarters, surprised markets in the first quarter with profitable operations there.
Restructuring is expected to drive continued improvement in European financial results, Walker said in a statement.Contact Automotive News