Magna International misses profit estimates, warns on border tax
(Reuters) - Auto parts maker Magna International Inc's (MG.TO: Quote) (MGA.N: Quote) profit missed estimates for the first time in five quarters, and the Canadian company warned that a proposed border tax by the United States could hurt the automobile industry.
The company's shares were down 5.7 percent at C$55.47 on the Toronto Stock Exchange on Friday, while its U.S-listed stock was down 5.8 percent at $42.55.
"Any border adjustment tax I think would be negative for the whole industry," a company executive said on a post-earnings conference call.
U.S. House Republicans are pushing for the border adjustment tax as a way to boost U.S. manufacturing and pay for corporate tax cuts.
The plan, which would essentially tax imports but not exports, faces opposition from retailers, oil refiners and automakers who say it could raise prices for American consumers.
In an exclusive interview to Reuters on Thursday, U.S. President Donald Trump spoke positively about the border adjustment tax.
Magna, primarily an auto parts supplier, also assembles cars under contract from motor vehicle manufacturers. General Motors Co (GM.N: Quote), Volkswagen AG (VOWG_p.DE: Quote), BMW (BMWG.DE: Quote) and Ford Motor Co (F.N: Quote) are among its biggest customers.
Also, Magna's Mexican operations account for 14 percent of the company's total sales.
This could be hit by Trump's move to renegotiate the North American Free Trade Agreement, with a focus on cutting United States' large trade deficit with Mexico. Continued...