TORONTO (Reuters) -- Magna International Inc. shares hit a record high today as the Canadian supplier hiked its full-year sales forecasts after posting a better-than-expected profit and a 9 percent rise in revenue in the first quarter.
Magna, based near Toronto, credited rebounding North American auto demand and increased revenue from Europe, where its sales rose even though the industry overall has been hurt by lower production.
Net earnings climbed to $369 million, or $1.57 per share, in the quarter ended March 31 from $343 million, or $1.46 per share, a year earlier. Sales rose 9 percent to $8.36 billion, the company said in a statement.
Analysts had expected a profit of $1.43 a share on revenue of $8.09 billion, according to Thomson Reuters. The results and outlook sent Magna shares to record levels, rising 3.2 percent to close at $64.71 in New York.
Magna's fortunes are closely linked to the health of the U.S. vehicle market and the Detroit Three -- Ford Motor Co., General Motors Co. and Chrysler Group.
The automakers have seen a steady recovery since the industry bottomed in 2008 and 2009 with bankruptcies by GM and Chrysler.
Magna saw a 3 percent rise in its North American production sales, the company's name for its core business of manufacturing vehicle parts. Production sales exclude Magna's smaller vehicle-assembly and tooling operations.
In Europe, Magna's production sales gained 5 percent even as the broader industry struggled. The auto parts maker has been pushing to turn around inefficient operations in Europe, where recovery has lagged North America.
"This is a very strong performance given the weakness in the European auto industry," analyst David Tyerman wrote in a note to clients, adding that Magna's exposure to stronger players like Mercedes, BMW and Volkswagen AG likely helped.
Carmakers have said that the European auto industry has yet to turnaround and that some stabilization might be seen toward the end of the year, or early 2014.
Outlook shines in N.A.
Magna, which makes parts ranging from mirrors and auto bodies to electronics and powertrain systems, said total sales for 2013 were expected to come in between $32.6 billion and $34 billion, above its previous forecast of $32 billion to $33.4 billion.
It expected total production sales for the year to be between $27.2 billion and $28.2 billion, up from its previous forecast range of $27 billion and $28 billion. The higher forecast was due entirely to better expectations from North America. The production sales forecast for Europe was revised lower.
Share buyback
During the quarter, Magna repurchased 1.6 million common shares for $88 million as part of its 12 million share repurchase program which expires in November.
In its annual general meeting with shareholders, Magna indicated its intent to repurchase all the remaining shares it was allowed to under the buyback program, which represents some 4.3 percent of outstanding stock.
Magna, which also manufactures complete vehicles on a contract basis, saw sales in that segment rise 33 percent to $798 million.
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