Magna earnings edge down, margin forecast up
By Allison Martell
(Reuters) - Magna International Inc (MG.TO: Quote)(MGA.N: Quote), the Canadian auto parts maker, reported slightly lower second-quarter earnings on Friday as the impact of a strong U.S. dollar offset increased vehicle production in North America, and raised its margin forecast.
Auto sales in the United States and Canada were robust in the quarter as cheaper gasoline and low interest rates drove the shift toward sport utility vehicles and pickup trucks.
But the dollar .DXY has gained about 20 percent against a basket of major currencies in the past 12 months, making sales in Canada, Europe and elsewhere less valuable in dollar terms. Magna said currency translation reduced sales by $890 million in the quarter.
The company slightly raised its 2015 sales forecast to $30.9 billion to $32.6 billion from $30.8 to $32.5 billion, but expects the 2015 operating margin to be about 8 percent, higher than the high-7-percent range it forecast in May.
In April, it sold much of its vehicle interiors business, typically a lower-margin business, to Spain's Grupo Antolin. Last month it said it had agreed to buy closely held automotive transmissions producer Getrag.
Net income fell to $483 million, or $1.16 a share, from $510 million, or $1.16 a share, a year earlier.
On an adjusted basis, the company earned $1.19 per share for the second quarter, slightly above the average analyst estimate of $1.18, according to Thomson Reuters I/B/E/S. Sales fell 8.7 percent to $8.13 billion, while Wall Street expected $8.09 billion. Continued...