Magna Collaborates with Zoltek

Magna Exteriors and Interiors (MEI), an operating unit of Magna International Inc. (MGA - Analyst Report), has collaborated with strategic development partner Zoltek to provide composite parts and systems of carbon fiber for high-volume automotive applications. The collaboration will support the automakers to manufacture lighter and more fuel-efficient vehicles.

Zoltek is one of the leading producers of commercial carbon fiber based in St. Louis, MO. Both Magna and Zoltek are jointly producing EpicBlendSMC EB CFS-Z, which is a low-cost carbon fiber sheet molding compound (SMC), under the collaboration. SMC utilizes Zoltek’s Panex 35 commercial carbon fiber together with MEI’s unique EpicBlendSMC formulations and production expertise.

The EB CFS-Z product is part of EpicBlendSMC product line. With this product, Magna offers manufacturer with an expanded range of lightweight parts, sub-systems and semi-structural applications for automotive, commercial truck and other markets. The EB CFS-Z sheet molding compound is also directly sold by MEI.

Both companies possess extensive core manufacturing capabilities, which will likely benefit customers in North America and Europe along with minimizing the cost and reducing the import quantity of carbon fiber in these markets.

Magna, 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, besides engineering and assembling complete vehicles, primarily for sale to original equipment manufacturers (OEMs) of cars and light trucks.

Magna also focus on development of lightweight solutions which will increase the fuel efficiency and reduce the emission. The company currently retains a Zacks Rank #2 (Buy).

Magna reported earnings per share of $1.49 in the fourth quarter of 2012, up 12.9% from $1.32 in the year-ago quarter and outpaced the Zacks Consensus Estimate of $1.14. Net income increased 12.5% to $351.0 million from $312.0 million in the year-ago quarter.

Revenues went up 10.8% to $8.03 billion in the reported quarter, exceeding the Zacks Consensus Estimate of $7.75 billion. The increase in revenues was driven by improvement in North American and Rest of World (ROW) production sales and higher tooling, engineering and other sales together with improved complete vehicle assembly sales.

Few stocks that are performing well in the industry where Magna operates are Oshkosh Corporation (OSK - Snapshot Report), STRATTEC Security Corporation (STRT - Snapshot Report) and Gentherm Incorporated (THRM - Snapshot Report). Gentherm and Strattec Security are Zacks Rank #1 (Strong Buy) stocks while Oshkosh carries a Zacks Rank #2 (Buy).