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Magna (MGA) Q3 Earnings Top Estimates, Rise Y/Y, Guidance Up
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Magna International Inc. (MGA - Free Report) reported third-quarter 2020 adjusted diluted earnings of $1.95 per share, up 38% from the $1.41 recorded in the year-ago period.
The reported figure also surpassed the Zacks Consensus Estimate of $1.35. Higher-than-expected revenues across all four segments of the company resulted in this outperformance.
For the reported quarter, net sales declined 2% from the prior-year period to $9,129 million. Nonetheless, revenues beat the Zacks Consensus Estimate of $8,953 million.
Magna International Inc. Price, Consensus and EPS Surprise
The Body Exteriors & Structures segment’s revenues for the reported quarter came in at $3,858 million, down 3% from the $3,984 million reported in the year-ago quarter. Lower European light vehicle production and net customer price concession subsequent to the third quarter of 2019 resulted in soft revenues. The figure, however, beat the consensus mark of $3,744 million. Also, the segment reported adjusted EBIT of $390 million, up from the $306 million posted in the prior-year quarter due to cost savings, lower launch costs and productivity improvements during the third quarter.
For the September-end quarter, the Power & Vision segment revenues climbed to $2,722 million from the prior-year figure of $2,696 million. The launch of programs during or subsequent to the third quarter of 2019 and the net strengthening of foreign currencies against the U.S. dollar boosted the unit’s sales. Moreover, the revenue figure surpassed the Zacks Consensus Estimate of $2,574 million. Also, pre-tax profit totaled $227 million compared with the $167 million recorded in third-quarter 2019.
Revenues in the Seating Systems segment inched up 1% year over year to $1,280 million in the July-September quarter thanks to roll out of programs during or subsequent to the third quarter of 2019 and the negative impact of the labor strike during the prior-year quarter. The metric also topped the Zacks Consensus Estimate of $1,177 million. Pretax profit was $66 million versus the prior-year profit of $56 million.
During the July-September period, the Complete Vehicles segment’s revenues were down 8% year on year to $1,402 million amid lower assembly volumes, due to the COVID-19 pandemic. The figure, nevertheless, surpassed the consensus mark of $1,361 million. Adjusted EBIT also grew to $70 million from the $29 million reported in the prior year on the back of a favorable program mix, higher engineering sales and cost-containment efforts.
Financials & Dividend
Magna had $1,498 million cash and cash equivalents as of Sep 30, 2020 compared with $1,276 million on Dec 31, 2019. It had a long-term debt of $3,832 million as of Sep 30, 2020, reflecting a rise from the $3,062 million recorded on Dec 31, 2019. For the reported quarter, cash provided from operating activities totaled $1,612 million as compared with the $750 million provided in the year-ago quarter.
Magna’s board of directors announced a dividend of 40 cents per share for third-quarter 2020, payable on Dec 4 to shareholders of record on Nov 20, 2020.
2020 Guidance
Magna expects full-year revenues in the band of $31.5-$32.5 billion, up from the previous estimate of $30-$32 billion amid gradual recovery in the light vehicle production in North America and Europe. Adjusted EBIT margin is anticipated in the range of 4-4.4%, higher than the earlier projection of 2.9-3.3%. The company envisions capital spending of $1.3 billion for 2020, down from the previous forecast of $1.4 billion.
Better-ranked stocks in the same sector include American Axle Manufacturing Holdings Inc (AXL - Free Report) , Autoliv Inc (ALV - Free Report) and Lear Corporation (LEA - Free Report) , all of which sport a Zacks Rank of 1, at present.
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A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time. See 8 breakthrough stocks now>>
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Magna (MGA) Q3 Earnings Top Estimates, Rise Y/Y, Guidance Up
Magna International Inc. (MGA - Free Report) reported third-quarter 2020 adjusted diluted earnings of $1.95 per share, up 38% from the $1.41 recorded in the year-ago period.
The reported figure also surpassed the Zacks Consensus Estimate of $1.35. Higher-than-expected revenues across all four segments of the company resulted in this outperformance.
For the reported quarter, net sales declined 2% from the prior-year period to $9,129 million. Nonetheless, revenues beat the Zacks Consensus Estimate of $8,953 million.
Magna International Inc. Price, Consensus and EPS Surprise
Magna International Inc. price-consensus-eps-surprise-chart | Magna International Inc. Quote
Segmental Performances
The Body Exteriors & Structures segment’s revenues for the reported quarter came in at $3,858 million, down 3% from the $3,984 million reported in the year-ago quarter. Lower European light vehicle production and net customer price concession subsequent to the third quarter of 2019 resulted in soft revenues. The figure, however, beat the consensus mark of $3,744 million. Also, the segment reported adjusted EBIT of $390 million, up from the $306 million posted in the prior-year quarter due to cost savings, lower launch costs and productivity improvements during the third quarter.
For the September-end quarter, the Power & Vision segment revenues climbed to $2,722 million from the prior-year figure of $2,696 million. The launch of programs during or subsequent to the third quarter of 2019 and the net strengthening of foreign currencies against the U.S. dollar boosted the unit’s sales. Moreover, the revenue figure surpassed the Zacks Consensus Estimate of $2,574 million. Also, pre-tax profit totaled $227 million compared with the $167 million recorded in third-quarter 2019.
Revenues in the Seating Systems segment inched up 1% year over year to $1,280 million in the July-September quarter thanks to roll out of programs during or subsequent to the third quarter of 2019 and the negative impact of the labor strike during the prior-year quarter. The metric also topped the Zacks Consensus Estimate of $1,177 million. Pretax profit was $66 million versus the prior-year profit of $56 million.
During the July-September period, the Complete Vehicles segment’s revenues were down 8% year on year to $1,402 million amid lower assembly volumes, due to the COVID-19 pandemic. The figure, nevertheless, surpassed the consensus mark of $1,361 million. Adjusted EBIT also grew to $70 million from the $29 million reported in the prior year on the back of a favorable program mix, higher engineering sales and cost-containment efforts.
Financials & Dividend
Magna had $1,498 million cash and cash equivalents as of Sep 30, 2020 compared with $1,276 million on Dec 31, 2019. It had a long-term debt of $3,832 million as of Sep 30, 2020, reflecting a rise from the $3,062 million recorded on Dec 31, 2019. For the reported quarter, cash provided from operating activities totaled $1,612 million as compared with the $750 million provided in the year-ago quarter.
Magna’s board of directors announced a dividend of 40 cents per share for third-quarter 2020, payable on Dec 4 to shareholders of record on Nov 20, 2020.
2020 Guidance
Magna expects full-year revenues in the band of $31.5-$32.5 billion, up from the previous estimate of $30-$32 billion amid gradual recovery in the light vehicle production in North America and Europe. Adjusted EBIT margin is anticipated in the range of 4-4.4%, higher than the earlier projection of 2.9-3.3%. The company envisions capital spending of $1.3 billion for 2020, down from the previous forecast of $1.4 billion.
Zacks Rank & Key Picks
Magna currently carries a Zacks Rank of 3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Better-ranked stocks in the same sector include American Axle Manufacturing Holdings Inc (AXL - Free Report) , Autoliv Inc (ALV - Free Report) and Lear Corporation (LEA - Free Report) , all of which sport a Zacks Rank of 1, at present.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
See 8 breakthrough stocks now>>