Auto parts maker Magna International is raising its full-year profit guidance as its business is performing better than expected. Revenue in the second quarter was $21.6 billion, up 14 percent year-on-year.
Magna, founded by Austro-Canadian Frank Stronach, justifies the increase in sales not only with higher production, but also with new orders and higher sales in the complete vehicle segment. They are assembled at Magna Steyr in Graz.
According to the quarterly report, the production volume in Graz fell by 13 percent in the second quarter, and 26,900 vehicles were assembled (after 31,000). In the entire first half of the year, 60,800 vehicles rolled off the assembly line. The program change mentioned led to higher sales in the first half of the year, which at $3.1 billion were 18 percent higher than the same period last year. The operating result at Magna Steyr, on the other hand, declined significantly. Instead of $113 million, $86 million remained, which corresponds to a profit margin of 2.7 percent. The decline resulted primarily from higher start-up costs and apparently preparations for further assembly orders, according to the explanations.
For the first half of the year, Magna’s bottom line is diluted earnings per share of $1.91, down from $0.70 a year earlier. Given the positive development, Magna has raised its full-year guidance from $40.2-41.8 billion to $41.9-43.5 billion. Magna International’s adjusted net income is said to be between $1.4 billion and $1.6 billion instead of $1.3 billion to $1.5 billion.
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