Strong Sales but Lagging Expectations
Friday, Magna International Inc MGA reported fourth-quarter 2023 sales of $10.45 billion, almost in line with the consensus of $10.46 billion.
Sales increased 9% Y/Y, compared to a 7% increase in global light vehicle production, including 5%, 7%, and 12% higher production in North America, Europe, and China, respectively.
Sales increased by 4%, excluding foreign currency translation and acquisitions net of divestitures.
Factors at Play
In addition to higher global vehicle production, the company says sales benefitted from the launch of new programs and acquisitions net of divestitures, partially offset by the negative impact of lost vehicle production as a result of the UAW labor strikes at certain customers during the fourth quarter of 2023, which negatively impacted sales by approximately $275 million.
Adjusted EBIT increased to $558 million in the fourth quarter of 2023 compared to $367 million in the fourth quarter of 2022, reflecting productivity and efficiency improvements. Adjusted net income attributable to Magna International increased $113 million in the fourth quarter of 2023 compared to the fourth quarter of 2022.
Adjusted diluted earnings per share was $1.33, up from $0.94 a year ago, below the consensus estimate of $1.48.
Dividend and Guidance
Magna declared a fourth-quarter dividend of $0.475 per share, up 3%, representing 14th consecutive year of fourth-quarter dividend increases. The dividend is payable on March 8, with a record date of February 23.
Magna forecasts fiscal year 2024 sales of $43.8 billion-$45.4 billion versus a consensus of $44.97 billion. The company sees adjusted net income of $1.6 billion-$1.8 billion and adjusted EBIT margin of 5.4%-6.0%.
For 2024, Magna sees Light Vehicle Production of 15.7 million, 17.4 million, and 28.3 million in North America, Europe, and China, respectively.
For the fiscal year 2026, the company expects sales of $48.8 billion-$51.2 billion, with an adjusted EBIT margin of 7.0%-7.7%. For 2026, Light Vehicle Production is expected to be 16.1 million, 17.3 million, and 30.6 million in North America, Europe, and China, respectively.
Stock Reaction
MGA shares are down 6.08% at $55.11 on the last check Friday.
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