Auto parts maker Magna forecasts 2014 sales below estimates
(Reuters) - Canadian auto parts maker Magna International Inc (MG.TO: Quote) MGA.N forecast 2014 sales below analysts' expectations due to lower revenue in its complete vehicle assembly business.
The company, one of the world's largest parts suppliers, said it expects total sales of $33.8 billion to $35.5 billion in 2014. Analysts on average were expecting $35.8 billion, according to Thomson Reuters I/B/E/S.
Magna, which manufactures complete vehicles on a contract basis, forecast sales in that segment to dip to $2.6 billion-$2.9 billion in 2014, from a revised 2013 forecast of $3 billion-$3.2 billion.
The Aurora, Ontario-based company in November raised its 2013 forecast on the back of stronger-than-expected results and strength in its European business.
"Our outlook reflects our commitment to improving operating results in Europe including through ongoing restructuring, implementing operational improvements and exercising discipline in quoting new business," Chief Executive Don Walker said in a statement on Wednesday.
Total production sales in 2014 are estimated at $28.6 billion to $29.9 billion, above its 2013 forecast of $28.1 billion to $28.7 billion. Production sales are Magna's core business of manufacturing vehicle parts.
Magna forecast operating margin in the mid-6 percent range for the year.
The company said it expects capital spending of about $1.4 billion in 2014, compared to about $1.3 billion in 2013.
Magna shares closed at C$92.14 on the Toronto Stock Exchange on Tuesday. The stock has gained about 82 percent in the last year.
(Reporting by Ashutosh Pandey in Bangalore and Susan Taylor in Toronto; Editing by Sriraj Kalluvila)
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