Magna Q4 Earnings & Revs Beat Estimates - Analyst Blog

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Magna International Inc. 's ( MGA ) adjusted earnings per share of $2.33 in the fourth quarter of 2013 improved 39.5% from $1.67 in the year-ago quarter. Earnings per share outpaced the Zacks Consensus Estimate of $1.53.

On a reported basis, the company reported profit of $458 million or $2.03 per share compared with $351 million or $1.49 in the fourth quarter of 2012.

Revenues went up 14.2% to $9.2 billion in the reported quarter, beating the Zacks Consensus Estimate of $8.9 billion. The upside was driven by increased production sales in North America, Europe, and Asia, together with higher tooling, engineering and other sales and improved complete vehicle assembly sales. This was partially offset by decline in Rest of World production sales.

Vehicle production rose 6% to 4.04 million units in North America and 5% to 4.9 million units in Europe. Operating income increased 50.7% to $514 million in the quarter from $341 million in the year-ago quarter.

Fiscal 2013 Performance

Magna's adjusted earnings increased 26% to $7.23 per share for full-year 2013 from $5.74 in 2012, exceeding the Zacks Consensus Estimate of $6.42. Revenues for full-year 2013 rose 13% to $34.8 billion from $30.8 billion in 2012. Revenues surpassed the Zacks Consensus Estimate of $34.5 billion.

Segment Details

Revenues from External Production (comprising North America, Europe, Asia and ROW units) went up 14.2% to $7.5 billion in the reported quarter.

Revenues from North America increased 13% to $4.4 billion, driven by product launches, positive impact of acquisitions and increased production.

Revenues from Europe went up 17% to $2.6 billion in the period. The year-over-year improvement was attributable to favorable currency translations, benefits of acquisitions, launch of new programs and higher production volume.

Revenues from Asia surged 29% to $399 million in the reported quarter. The improvement was attributable to higher production volume, synergies from new launches and favorable currency translations.

Revenues from ROW decreased 11% to $188 million due to unfavorable currency translations, partly offset by increased price and production volume.

Revenues from the Complete Vehicle Assembly segment went up 13% to $788 million in the quarter, with a 17% rise in assembly volumes to 36,704 units.

Revenues from Tooling, Engineering & Other expanded 16% to $841 million in the quarter.

Financial

Magna International had $1.6 billion in cash and cash equivalents as of Dec 31, 2013, compared with $1.5 billion as of Dec 31, 2012. The company had long-term debt of $332 million as of Dec 31, 2013, as against $361 million as of Dec 31, 2012.

In 2013, the company's cash flow from operations increased to $2.57 billion from $2.21 billion a year ago. Capital expenditures declined to $1.17 billion in the period from $1.27 million in 2012.

Dividend

The board of directors declared a 19% increase in the quarterly dividend to 38 cents per share. The dividend is payable on Mar 28, 2014 to shareholders of record as of Mar 14, 2014.

Outlook

For full-year 2014, Magna expects revenues between $28.4 billion and $29.7 billion in the External Production segment. Complete Vehicle Assembly sales are projected in the range of $2.8-$3.1 billion.

For 2014, total revenue of the company is expected between $33.8 billion and $35.5 billion. Operating margin is projected to be around 6.5% with a tax rate of 24.5%. Capital expenditures are anticipated to be around $1.4 billion.

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, apart from engineering and assembling complete vehicles, primarily for sale to original equipment manufacturers of cars and light trucks. The company currently carries a Zacks Rank #2 (Buy).

Other better-performing stocks in the industry include STRATTEC Security Corp. ( STRT ), Allison Transmission Holdings, Inc. ( ALSN ) and Gentex Corp. ( GNTX ). While STRATTEC Security and Allison Transmission sport a Zacks Rank #1 (Strong Buy), Gentex carries a Zacks Rank #2.



ALLISON TRANSMN (ALSN): Free Stock Analysis Report

GENTEX CORP (GNTX): Free Stock Analysis Report

MAGNA INTL CL A (MGA): Free Stock Analysis Report

STRATTEC SEC CP (STRT): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Earnings , Stocks

Referenced Stocks: ALSN , GNTX , MGA , STRT

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