AURORA, Ontario – Magna International (NYSE:) Inc. (TSX: MG; NYSE: MGA) reported a major earnings miss within the first quarter of 2024.
The automotive provider introduced adjusted earnings per share (EPS) of $1.08, falling in need of the analyst consensus of $1.25. Despite assembly income expectations with $10.97 billion, which aligns with the consensus estimate, the corporate’s shares dropped by 4.94% because the market responded negatively to the earnings shortfall.
The firm’s gross sales noticed a modest enhance of three% to $11.0 billion in comparison with the primary quarter of the earlier 12 months, barely outpacing the two% rise in world mild automobile manufacturing. This development was attributed to new program launches and the acquisition of Veoneer (NYSE:) Active Safety. However, challenges reminiscent of decrease volumes within the Complete Vehicles phase and foreign money fluctuations weighed on the outcomes.
Magna additionally disclosed asset impairments and restructuring prices totaling $316 million associated to Fisker (OTC:), which impacted the web revenue attributable to Magna International Inc., lowering it to $9 million for the quarter from $209 million in the identical interval final 12 months. The diluted EPS for the quarter was reported at $0.03, a stark lower from $0.73 within the first quarter of 2023.
The firm maintained its 2024 Adjusted EBIT Margin Outlook vary of 5.4%-6.0%, indicating stability in its future monetary expectations. In the press launch, administration highlighted operational excellence and value initiatives, productiveness and effectivity enhancements, and decrease prices at sure beforehand underperforming amenities as key contributors to the adjusted EBIT enhance to $469 million from $449 million within the first quarter of 2023.
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Magna’s CEO commented on the outcomes, emphasizing the corporate’s dedication to operational enhancements and value effectivity, which have helped to mitigate among the unfavourable impacts on profitability. However, the market’s response means that buyers had been anticipating a stronger efficiency.
The firm’s monetary well being stays strong, with $591 million generated from operations earlier than adjustments in working property and liabilities and a return of $134 million to shareholders by way of dividends. Looking forward, Magna’s full-year outlook stays unchanged.
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