Magna’s first-quarter earnings jump 43 percent
May 9, 2011 by Sunny Freeman The Canadian Press
Auto parts giant Magna International Inc. said that its first-quarter earnings grew 43 percent to $322 million US, beating analyst expectations as vehicle production increased.
On a per share basis, the Aurora, Ont.-based company, which reports in U.S. dollars, earned $1.30 per share in the first quarter of 2011, topping estimates of $1.16 per share, according to Thomson Reuters.
That was up from $224 million or 99 cents per share in the comparable period a year ago.
The company also raised its 2011 outlook and anticipates total sales to be between $27.1 billion and 28.5 billion, up from an earlier projection between $24.8 billion and 26.3 billion.
The quarterly results included a $9 million writedown on a real estate asset, while the 2010 results included a $14 million gain from the sale of one of its plants.
Revenue increased 34 percent to $7.2 billion, up from $5.4 million in the year ago period.
Vehicle production grew 17 percent in North America and 10 percent in Western Europe, compared to the first quarter of 2010.
“The key reasons for the continued strengthening of North American light vehicle production are improving auto sales in the region, coupled with dealer inventories that are below long-term historical averages,” the company said in a release.
Total vehicle assembly sales grew 51 percent to $674 million, compared to $446 million for the first quarter of 2010.
It added that its sales in the rest of the world increased 69 percent, a key driver of growth as the company diversifies away from its two main markets.
“We are currently expanding in a number of regions included in our Rest of World segment, and expect continued strong sales growth in this segment,” the company said.
Magna said that the earthquake and tsunami in Japan will continue to disrupt global vehicle production throughout the year, though it said that the impact of the disruptions has not had a material impact on its results, nor does it expect it to in the future.
Magna has more than 96,000 employees at 256 plants and 82 product development, engineering and sales centres around the world.
Frank Stronach, the tool and die maker who went on to build a multibillion-dollar international auto parts empire, stepped down as Magna chairman after the company’s annual meeting last week in Markham, Ont.
Stronach, who was re-elected as a director, will be given the title of founder and honorary chairman. The board also appointed two new independent directors – Kurt Lauk and William Young – at the general meeting.