Magna Q2 profits rise 23% to $510 million on higher N.A., Europe output
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(Reuters) -- Canadian auto parts maker Magna International Inc.'s second-quarter profits rose 23 percent to $510 million on strong demand in North America and a continuing recovery in Europe.
Revenues during the second quarter rose 6 percent to $9.46 billion, the company said today.
The results were aided by a 3 percent increase in North America vehicle output and 2 percent increase in vehicle production across Europe during the second quarter.
Magna, one of the world's largest auto parts makers, said North American sales rose 10 percent to $4.75 billion, while they rose 4 percent to $2.66 billion in Europe in the second quarter ended June 30.
Magna, based in Aurora, Ontario, also raised its full-year sales forecast to $35.6 billion to $37.3 billion from $34.9 billion to $36.6 billion. The company said it expects to produce an operating profit margin of nearly 7 percent for the full year.
Excluding restructuring charges, the company earned $2.37 per share, higher than the average analyst estimate of $2.26, according to Thomson Reuters I/B/E/S.
In a report this week ahead of the company's results, Wells Fargo analyst Richard Kwas expected Magna to benefit from better-than-expected volumes in Europe during the latest quarter, "contribution margin flow through," and restructuring traction in Europe, with results offset "by weakness in South America as well as launch cost ramp."
The company has restructured its European operations to cope with the region's downturn. It had previously said it expects most of the turnaround effort to be completed this year, with some spillover into 2015.
Sales in Asia climbed 23 percent to $402 million. They fell 33 percent to $163 million in rest of the world, which primarily includes South America, where Magna has struggled to pass on an inflation-driven rise in costs onto customers.Contact Automotive News