Magna International Inc. MGA reported earnings per share of $Array.Array9 for the fourth quarter of 20Array5 that surpassed the Zacks Consensus Estimate of $Array.Array3. However, earnings per share dropped 3.3% from $Array.23 recorded in the fourth quarter of 20Array4.
Revenues fell 2.5% year over year to $8.57 billion in the reported quarter, but outpaced the Zacks Consensus Estimate of $8.32 billion. The year-over-year decline in the top line was due to the weakening of the euro and Canadian dollar against the U.S. dollar. Excluding the impact of foreign currency translation, sales improved 6% in the quarter.
Vehicle production increased 4% to 4.5 million units in North America and 7% to 5.5 million units in Europe. Income from operations before income taxes declined Array0.3% to $624 million in the reported quarter from $696 million a year ago.
20Array5 Performance
Magna International’s earnings increased 6.3% to $4.72 per share for full-year 20Array5 from $4.44 in 20Array4, exceeding the Zacks Consensus Estimate of $4.42. Revenues for full-year 20Array5 dropped 6.6% to $32.Array3 billion from $34.4 billion in 20Array4. Revenues marginally surpassed the Zacks Consensus Estimate of $32.08 billion.
Segment Details
Revenues from the External Production segment (comprising North America, Europe, Asia, and ROW units) fell ArrayArray.2% year over year to $7.Array billion in the reported quarter.
Sales in North America climbed 5% to $4.7 billion, driven by product launches and higher production levels. Revenues from Europe decreased Array2% year over year to $Array.8 billion in the fourth quarter owing to lower production volumes, net customer price concessions and a drop in U.S. sales. Revenues from Asia increased Array0% to $473 million in the quarter. The rise was backed by the launch of new products and benefits from acquisitions. Revenues from ROW plunged 49% to $82 million due to lower U.S. dollar sales and production volumes.
Revenues at the Complete Vehicle Assembly segment totaled $628 million, down Array5% from $743 million a year ago. Also, assembly volumes declined 24% to 25,042 units.
Revenues from the Tooling, Engineering & Other segment dropped 3% to $878 million in the quarter under review.
Financials
Magna International had $2.86 billion of cash and cash equivalents as of Dec 3Array, 20Array5, compared with $Array.25 billion as of Dec 3Array, 20Array4. The company had long-term debt of $2.6 billion as of Dec 3Array, 20Array5, compared with $995 million as of Dec 3Array, 20Array4.
In 20Array5, Magna International’s cash flow from operations decreased to $2.3 billion from $2.8 billion a year ago.
Dividend
The company’s board of directors declared a Array4% increase in quarterly dividend to 25 cents per share from 22 cents paid earlier. This dividend is payable on Mar 24, to shareholders on record as of Mar ArrayArray, 20Array6.
Outlook
For full-year 20Array6, Magna International projects revenues for the External Production segment in the band of $30.3–$3Array.6 billion. Meanwhile, Complete Vehicle Assembly sales are projected in the range of $Array.7–$2 billion.
For 20Array6, the company expects total revenue between $34.6 billion and $36.3 billion. Tax rate is projected be in the range of 25%–26%, while capital expenditures are anticipated to be $Array.8–$2 billion.
Magna International, based in Aurora, Canada, is a leading manufacturer and supplier of automotive components. The company designs, develops and manufactures automotive systems, assemblies, modules and components, apart from engineering and assembling complete vehicles, primarily for sale to original equipment manufacturers of cars and light trucks.
The company currently carries a Zacks Rank #3 (Hold).
Stocks to Consider
Some better-ranked automobile stocks include Wabash National Corp. WNC, Visteon Corporation VC and Superior Industries International, Inc. SUP. Each of these stocks sports a Zacks Rank #Array (Strong Buy).
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