Magna International Inc.
) posted its first quarter 2012 earnings per share of $1.46,
surpassing the Zacks Consensus Estimate and year-ago earnings of
$1.30 by 12%. The increase in earnings was attributable to higher
production and sales, along with profits earned from programs
launched in 2011.
The earnings were also boosted by the decrease in weighted
average number of shares outstanding due to repurchase of shares.
In absolute terms, profits were $343 million in the reported
quarter, up 7% compared with $322 million in the year-ago
The company's revenues for the quarter came in at $7.7 billion,
up 7% compared with $7.2 billion in the year-ago quarter. It
surpassed the Zacks Consensus Estimate of $7.4 billion. The
increase in revenues was due to increase in production and sales in
North America and Europe as well as in Rest of the World (ROW).
However, it was partially offset by a decline in sales in Complete
Vehicle Assembly and Tooling, Engineering & Other segments.
Magna saw a 10% boost in operating income to $439 million or 6%
of sales compared with $400 million or 6% of sales in the first
quarter of 2011. The operating income went up due to higher margins
earned from increased production and sales, along with decreased
costs associated with the upcoming launches.
Revenues from External Production Sales - which consists of
sales in North America, Europe and ROW - escalated 10% to $6.6
billion in the reported quarter. Vehicle production went up by 17%
to 3,950 million units in North America and 7% to 3,449 million
units in Western Europe. The adjusted earnings before interest and
taxes (EBIT) in the segment went up 7.5% to $459 million from $427
million in the first quarter of 2011.
Revenues from North America went up 10% to $3.9 billion in the
quarter. The higher revenues were due to higher production and
launch of new programs including Volkswagen Passat and Chevrolet
Sonic. Revenues from Europe improved 6% to $2.3 billion.
The rise in revenues was due to launch of Range Rover Evoque and
acquisition of BDW technologies group by the company. Revenues from
ROW improved 29% to $408 million. The growth in revenues was driven
by acquisition of TKASB and launch of new programs in Brazil and
Revenues in the Complete Vehicle Assembly segment decreased 11%
to $599 million. The decline was attributable to decrease in volume
of Peugeot RCZ, MINI Countryman and Aston Martin Rapide.
Tooling, Engineering and Other sales were down 7% to $422
Magna International had $1.27 billion cash and cash equivalent
as of March 31, 2012 compared to $1.33 billion as of December 31,
2011. The decline in cash was driven by cash used in investing and
The company had total debt of $234 million as of March 31 2012
compared with $71 million as of December 31, 2011. In the first
quarter of 2012, Magna's cash flow from operations was $229 million
compared with cash used in operations of $112 million during the
same period of 2011.
For full year 2012, the company anticipates revenues from
External Production Sales in the range of $24.5 billion to $25.6
billion. Total production from North America is expected to be 14.4
million units and from Europe 12.7 million units.
Revenues from Complete Vehicle Assembly is expected in the range
of $2.4 billion to $2.7 billion. With this, the company expects
total revenues to be $29 billion to $30.5 billion. The company also
expects operating margin to be below 5% and capital spending of
$1.5 billion for the year.
Magna International, based in Aurora, Canada, is a leading
manufacturer and supplier of automotive components. The company
designs, develops and manufactures automotive systems, assemblies,
modules and components, besides engineering and assembling complete
vehicles, primarily for sale to original equipment manufacturers
(OEMs) of cars and light trucks. It competes with
Dana Holding Corporation
Magna is expected to benefit from new emission standards in the
U.S. This in turn should raise the demand for new auto parts and
other components. The company's significant acquisitions and
expansion will enhance its global footprint and provide an edge
over to its peers. Currently, it retains a Zacks #2 Rank on its
shares, which translates into a short-term Buy rating.
DANA HOLDING CP (DAN): Free Stock Analysis
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MAGNA INTL CL A (MGA): Free Stock Analysis
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