Magna's Quarterly Results Fall Short Due to Fewer Vehicle Assemblies

05 Aug 2024 CW Team

Auto parts supplier Magna International missed analysts' estimates for its second-quarter results, primarily due to halted production for certain vehicles and decreased volumes of assembled automobiles. Magna, which serves clients such as BMW, Mazda, and Ferrari, is involved in both parts production and complete vehicle assembly for various automakers.

Magna reported that sales were adversely affected by the cessation of production for specific programs, including the BMW 5-Series, and by reduced volumes of complete vehicle assembly. As a result, quarterly sales at its complete vehicle manufacturing unit fell by 18.6 per cent to $ 1.24 billion.

In contrast, Aptiv, a competitor, exceeded Wall Street's profit expectations on Thursday. However, its revenue from the segment producing electrical components decreased by 3 per cent due to reduced production by some of its customers.

In May, Magna faced asset impairments and restructuring costs totalling $ 316 million related to the struggling EV startup Fisker. Consequently, the Ontario-based company revised its 2026 sales forecast downward to a range of $ 44.0 billion to $ 46.5 billion, from the previous estimate of $ 48.8 billion to $ 51.2 billion.

For the second quarter ending in June, Magna reported adjusted earnings of $ 1.35 per share, falling short of the estimated $ 1.44 according to LSEG data. The company's quarterly revenue declined slightly to $ 10.96 billion, whereas analysts had anticipated around $ 11 billion.

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