(Reuters) - Canadian auto parts manufacturer Magna International Inc MG.TO MGA.N reported stronger-than-expected results and hiked its 2013 outlook on Wednesday, as strength in its European business boosted quarterly sales by nearly 13 percent.
The news pushed Magna stock up more than 4 percent to a record high of C$92.75 on the Toronto Stock Exchange, and to $87.29 in New York, also a record.
Magna, which has been working to turn around inefficient operations in Europe amid a lackluster recovery in the region, raised the low end of its production sales outlook for the year to $28.1 billion.
It expected higher total sales for the full year of between $33.9 billion and $34.8 billion, up from a forecast range earlier in the year of $33.3 billion to $34.7 billion.
“The beat was significant versus our forecast, but the 2013 guidance looks only slightly stronger than our forecast,” said Canaccord Genuity analyst David Tyerman in a client note, adding that the stock looked fully valued.
“(Magna) remains on a good growth track, which we expect will continue for at least the next couple of years. (Magna) should benefit from modest sales growth and margin expansion in Europe and emerging markets.”
The 2013 operating margin outlook was raised to 5.9 percent from 5.8 percent, while capital spending and the tax rate were lowered.
For the third quarter ended September 30, total sales rose to $8.34 billion.
In Europe, production sales jumped 18 percent to $2.36 billion. Production sales in North America rose 11 percent to $4.03 billion, while in the rest of the world they increased 16 percent to $574 million.
Sales from vehicle assembly rose 10 percent to $680 million, while tooling, engineering and other sales increased 6 percent to $695 million.
Profit, however, dropped 18 percent, hurt by charges of $33 million, or 14 cents a share, as the auto parts maker continued to restructure its European operations.
Magna has booked $54 million in restructuring charges in the first three quarters of this year, the company said during a conference call with analysts.
Net income fell to $319 million, or $1.39 per share, from $390 million, or $1.66 per share, a year earlier.
Analysts on average had expected a profit of $1.34 per share, on revenue of $8.23 billion, according to Thomson Reuters I/B/E/S.
Adjusted earnings from operations before income taxes and various expenses was $444 million, up from $352 million.
Magna shares, which have soared nearly 80 percent this year in Toronto and almost 70 percent in the United States, were at C$89.58 on the Toronto Stock Exchange and $85.69 in New York in midday trading on Wednesday.
Reporting by Solarina Ho in Toronto and Sayantani Ghosh in Bangalore; Editing by Bernadette Baum