Magna raises sales forecast after profit beat, Europe recovery
By Solarina Ho
(Reuters) - Canadian auto parts maker Magna International Inc (MG.TO: Quote) reported a 19 percent rise in its quarterly profit on Friday and raised its sales outlook for the year, buoyed by better-than-expected European and North American earnings.
The results sent Magna's stock, which have soared some 70 percent so far this year on the Toronto Stock Exchange, to an all-time high on Friday.
Magna's core business posted a double-digit rise in sales in Europe, where Magna has been pushing to turn around inefficient operations amid the region's soft recovery. The company said it is continuing to take steps to improve its business in Europe.
"It has taken a lot of hard work and there is certainly more to come, but we are headed in the right direction in Europe," Chief Executive Don Walker said, adding that he expects continued improvement in the coming quarters.
Further restructuring efforts are being pursued, with $94 million out of total estimated restructuring charges of $100 million still to be taken in the second half of the year. Magna so far has recognized roughly $6 million in those charges.
"Those costs relate to plans and actions that we're going to take in Europe," Vince Galifi, chief financial officer, said in an interview, adding that discussions were ongoing with a number of parties including labor and customers. He declined to give details.
"It's hard to tell whether that's going to be Q3 or Q4. We do expect we'll have some announcement before the end of this year. ... We're pleased with progress we're seeing in Europe."
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