May 10, 2012 / 12:48 PM / 6 years ago

CORRECTED-UPDATE 2-Magna profit rises on strong sales

* Q1 EPS $1.46 vs $1.30 a year earlier

* Company raises full year revenue forecast

* Shares jump 5.5 pct in early trading

TORONTO, May 10 (Reuters) - Magna International Inc, one of the world’s biggest auto parts manufacturers, said on Thursday quarterly profit and sales rose, and it boosted its outlook, sending its shares higher.

Magna, which is holding its annual meeting in Toronto on Thursday, said net income rose to $343 million, or $1.46 a share, in the first quarter, up from $322 million, or $1.30 a share, a year earlier.

Revenue increased 6.6 percent to $7.67 billion.

Analysts, on average, had forecast earnings of $1.30 a share and revenue of $7.5 billion, according to Thomson Reuters I/B/E/S.

The Aurora, Ontario-based company also announced a new vehicle assembly deal with Nissan Motor Co Ltd for its Infiniti. Starting in 2014, Magna’s European unit, Magna Steyr, will assemble an entry-level Infiniti compact vehicle based on Daimler’s Mercedes A-class cars. An industry paper, had in December, reported that Magna Steyr would likely produce the car at its factory in Graz, Austria.

Financial details of the agreement were not released because both companies are finalizing manufacturing and supply deals.

Magna shares rose 5.5 percent to C$45.01 in early trading on the Toronto Stock Exchange. Magna plans to buy back 12 million shares under a program scheduled to end in November, and its shares have climbed more than 20 percent from the start of the year.

Helped by rising vehicle production in the United States, Magna increased its revenue outlook for 2012 to between $29 billion and $30.5 billion. It previously forecast full-year revenue of $28 billion to $29.5 billion.

It forecast operating margins in the low 5 percent range.

Magna, which competes against such suppliers as Johnson Controls Inc and TRW Automotive Holding Corp, is trying to expand its market beyond North America and Europe into fast-growth areas such as Brazil, China and Eastern Europe.

Canada’s auto parts manufacturers have fallen from the ranks of global top 10 exporters because they have failed to branch out, according to a recent Scotiabank report. Canada was the world’s sixth-biggest auto-parts exporter until 2007, and last year lost its top 10 exporter spot to the Czech Republic.

Magna plans to launch 40 new factories between 2012 and 2014. It currently has about 108,000 employees in 286 manufacturing plants and 88 product-development, engineering and sales centers in 26 countries.

At Thursday’s annual meeting, shareholders may vote against re-electing Magna’s controversial founder, Frank Stronach, as director of the company due to corporate governance concerns.

Magna paid Stronach roughly $900 million in 2010 to cede control of the company he started. The buyout was approved by an independent committee that examined the deal, but there was no independent evaluation to determine if the deal was fair to minority shareholders.

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