TORONTO -- Magna International Inc. reported a lower fourth-quarter profit on Monday, despite a 25 percent jump in revenue, as earnings were squeezed by a series of non-cash charges.
Magna, a world leading automotive parts maker which counts big carmakers like General Motors and Ford Motor Co. as its major customers, said profit was $110 million, or $1.10 a share, in the quarter ended Dec. 31, down from $118 million, or $1.28 a share, a year earlier.
Profit was squeezed as three of Magna's subsidiaries took fourth-quarter charges in order to comply with new Canadian accounting regulations, reducing Magna's fourth-quarter earnings by $34 million, or 35 cents per share.
The charges included a $36 million writedown on goodwill and assets at its Intier Automotive Inc. and Tesma International Inc. subsidiaries, and an $18 million non-cash writedown of horse racing licenses and fixed assets at subsidiary Magna Entertainment Corp.
Seventeen analysts polled by Thomson First Call had forecast average earnings of $1.42 a share before writedowns, in a range between $1.34 and $1.50.
Sales were $3.55 billion in the quarter, up 25.4 percent from $2.83 billion a year earlier.
The company said content per vehicle rose by 20 percent in North America and 26 percent in Europe, while tooling and other automotive sales increased by 35 percent.
Net income from operations was $110 million, down from $120 million for the same quarter one year before.
The company also said it had set its quarterly dividend at 34 cents for shareholders of record on March 7.
Magna upped its first-quarter expectations for North America car and light truck production to 4.2 million units from 4 million units, leading it to raise its 2003 first quarter sales estimate to a range of $3.2 billion to $3.4 billion from its previous estimate of $3.1 billion to $3.3 billion.
The company said first-quarter earning per share from operations should be at the high end or exceed its previously estimated range of $1.25 to $1.45.
For the full-year, Magna reiterated light-vehicle production of 16 million units for North American and 16.2 million for Europe.
The company also reiterated its full year 2003 sales forecast of $13.3 billion to $14.1 billion, and earnings from operations estimate of $5.90 per share to $6.40 per share.
Shares of Magna, which are down about 2 percent in 2003, finished 29 cents lower at $55.09 on the New York Stock Exchange.