Magna profit grows more than expected on robust auto sales; stock up
(Reuters) - Canadian auto parts maker Magna International Inc (MG.TO: Quote) (MGA.N: Quote) reported a better-than expected rise in quarterly profit on Friday, helped by strong vehicle sales in North America and Europe, sending shares higher.
Low gasoline prices have boosted auto sales this year, especially in the United States.
The company, also a contract manufacturer, raised its forecast margin on earnings before interest and taxes for the full year to about 8 percent, from its previous estimate at the higher end of 7 percent.
Magna, which bought German automotive supplier Telemotive AG in April to expand into vehicle connectivity, counts General Motors Co (GM.N: Quote), Volkswagen AG (VOWG_p.DE: Quote), BMW (BMWG.DE: Quote) and Ford Motor Co (F.N: Quote) among its customers.
Shares jumped 4.5 percent to C$52.10 in early trading on the Toronto Stock Exchange.
On a call with analysts and investors, Chief Executive Don Walker said Magna was spending more time on advanced driver assistance systems, parts meant to assist drivers with cameras and sensors, collision-warning systems and autonomous driving.
"We would consider acquisitions, it would have to be in an area we want. We are not really looking at getting into infotainment," said Walker. "Basically any type of sensor that would help the automakers in autonomous driving is what we are focused on."
The Aurora, Ontario-based company said North American and European light vehicle production increased 2 percent and 6 percent respectively, from a year earlier.
Net income from continuing operations attributable to the company rose to $558 million, or $1.41 per share, for the second quarter ended June 30, from $538 million, or $1.29 per share, a year earlier. Continued...