Magna International Shares Decline on Disappointing Q4 Earnings

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Magna International, a leading automotive parts supplier, experienced a decline in its shares on Friday following lower-than-expected earnings for the fourth quarter.

Share Performance

During morning trading in Toronto, Magna’s shares dropped by 5.2% to C$74.78, bringing the total decline over the past year to 14%. On the New York Stock Exchange, the company’s shares were down 5.6% at $55.38, with a corresponding one-year drop of 14%.

Q4 Financial Results

Magna’s net income for the fourth quarter rose to $271 million, or 94 cents per share, compared to $95 million, or 33 cents per share, in the previous year.

Adjusted earnings per share increased to $1.33; however, this figure fell below the mean forecast of $1.46 according to analysts polled by FactSet.

Sales for the quarter reached $10.45 billion, reflecting a 9.3% increase. Although slightly below expectations of $10.48 billion, this growth was attributed to higher global vehicle production and the successful launch of new programs and acquisitions. However, the company noted that strikes by U.S. autoworkers during the quarter resulted in a loss of sales amounting to approximately $275 million.

Outlook for the Future

Magna anticipates sales for the upcoming year will range from $43.8 billion to $45.4 billion, surpassing the $42.8 billion generated in 2023 and exceeding the market’s estimate of around $45.3 billion. Looking ahead to 2026, the company projects a further increase in sales to between $48.8 billion and $51.2 billion.

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