TORONTO (Reuters) - Autoparts maker Magna International MGa.TO reported lower fourth-quarter profit on Wednesday, due to a number of charges as well as lower complete vehicle assembly sales.
The Canadian company said net profit fell to $28 million, or 24 cents a share, from $29 million, or 26 cents a share, a year earlier.
Magna said it had a number of unusual items in the quarter, including impairment charges, a valuation allowance on future income tax assets and restructuring charges, which cut net earnings by $1.21 per share.
Analysts, on average, had expected earnings for the quarter of $1.71 a share before special items, according to Reuters Estimates.
Also affecting earnings was a 21 percent decline in sales of complete vehicle assembly sales, to $981 million from $1.25 billion.
Overall, sales rose 7 percent to $6.84 billion from $6.37 billion, largely due to a rise in production sales. That beat analyst forecasts of $6.53 billion.
The Aurora, Ontario-based company said the value of its parts in cars in North America rose 13 percent. Content per vehicle in Europe gained 26 percent.
For the year, Magna said consolidated sales were up 8 percent to $26.1 billion from $24.2 billion in 2006.
Magna said it ended 2007 with one of the strongest balance sheets in the industry, with debt to capitalization of 9 percent and net cash of $2.2 billion.
“With our cash position, we think we’re in an ideal situation if the right acquisition comes up in the right product area,” said Vince Galifi, Magna’s chief financial officer.
“The overall economic environment has changed, and I think we have an opportunity to leverage that to our benefit.”
Magna said it sees consolidated sales in 2008 to be between $24.9 billion and $26.2 billion, based on full year 2008 light vehicle production volumes of around 14.4 million units in North America and around 15.6 million units in Europe.
Average dollar content per vehicle in 2008 is expected to be between $845 and $875 in North America. That’s down from a range of $855 to $885 the company gave in its outlook in January.
Magna said the difference reflects changing foreign exchange rates, which also allowed it to raise its outlook for Europe.
Magna now sees average dollar content per vehicle in Europe between $450 to $475, up from $440 to $465.
It sees its 2008 complete vehicle assembly sales between $3.6 billion and $3.9 billion.
Magna shares were down C$1.31, or 1.6 percent, at C$78.69 on the Toronto Stock Exchange around midday.
Additional reporting by Yinka Adegoke in New York; editing by Rob Wilson