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Magna International (MGA - Free Report) reported fourth-quarter 2021 adjusted earnings of $1.30 per share, declining 54% from $2.83 in the year-ago quarter. The bottom line topped the Zacks Consensus Estimate of 83 cents. Higher-than-expected EBIT across all segments led to the outperformance.
In the reported quarter, net sales declined 13.8% from the prior-year quarter to $9,110 million but topped the consensus mark of $8,940.8 million.
Magna International Inc. Price, Consensus and EPS Surprise
The Body Exteriors & Structures segment’s revenues in the reported quarter were $3,620 million, declining 18% year over year, affected by lower global light vehicle production and production disruptions brought about by the global semiconductor chip shortage. The figure missed the consensus mark of $3,624 million. Consequently, the segment reported adjusted EBIT of $168 million, down 69% from the year-ago period amid lower margins on reduced sales, labor and other operational inefficiencies due to semiconductor chip shortages and higher costs of production, commodity and energy costs. The adjusted EBIT, however, topped the consensus figure of $140 million.
In the reported quarter, the Power & Vision segment revenues edged down 12% to $2,804 million from the prior-year figure. Lower global light vehicle production led by production disruptions due to chip shortages and net customer price concessions led to the downside. The figure topped the consensus mark of $2,782 million. Low margins and operational inefficiencies in the quarter resulted in a 52% decline in segmental EBIT of $171 million. The figure outpaced the consensus mark of $112 million.
Revenues in the Seating Systems segment fell 7% year over year to $1,299 million in the reported quarter, led by lower global light vehicle production and the impact of production disruptions due to semiconductor chip shortages. The figure topped the consensus mark of $1,147 million. The segment reported adjusted EBIT of $49 million, down 42% from the corresponding quarter of 2020. The figure topped the consensus estimate of $19 million.
The Complete Vehicles segment’s revenues decreased 14% year over year to $1,511 million, amid lower assembly volumes and a weak Euro. The figure, however, crossed the consensus mark of $1,504 million. Adjusted EBIT declined 11% year over year to $98 million due to lower earnings on reduced engineering and assembly sales, including labor inefficiencies due to semiconductor chip shortages. The figure topped the consensus mark of $68 million.
Financials
Magna had $2,948 million cash and cash equivalents as of Dec 31, 2021. It had long-term debt of $3,538 million, down from $3,973 million in the year-ago quarter. In the reported quarter, cash provided from operating activities totaled $1,351 million, declining from the year-ago figure of $2,259 million.
During the quarter, MGA returned $378 million to shareholders through share repurchases and dividends. It repurchased 3.1 million shares for $251 million and paid out dividends of $127 million.
It has also raised quarterly cash dividend by 5% to 45 cents per share, payable on Mar 11, 2022, to shareholders of record as of the close of business on Feb 25, 2022.
Outlook for 2022
Magna expects full-year 2022 revenues in the band of $38.8-$40.4 billion. Adjusted EBIT margin is anticipated to be 6-6.4%. The company envisions capital spending of nearly $1.8 billion in 2022.
Tesla has an expected earnings growth rate of 35.21% for the current year. The Zacks Consensus Estimate for current-year earnings has been revised around 5% upward over the past 60 days.
Tesla’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters. TSLA pulled off a trailing four-quarter earnings surprise of 25.38%, on average. The stock has also rallied 5.4% over a year.
Goodyear has an expected earnings growth rate of 51.7% for the current year. The Zacks Consensus Estimate for current-year earnings has been revised around 1.1% upward over the past 60 days.
Goodyear’s earnings beat the Zacks Consensus Estimate in all of the trailing four quarters. GT pulled off a trailing four-quarter earnings surprise of 228.5%, on average. The stock has also rallied 12.1% over a year.
Genuine Parts has an expected earnings growth rate of 10.03% for the current year. The Zacks Consensus Estimate for earnings for the current year has been revised around 2.2% upward over the past 60 days.
Genuine Parts’ earnings beat the Zacks Consensus Estimate in all the trailing four quarters. GPC pulled off a trailing four-quarter earnings surprise of around 16%, on average. The stock has also rallied 27.6% over a year.
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Magna's (MGA) Q4 Earnings Surpass Estimates, Decline Y/Y
Magna International (MGA - Free Report) reported fourth-quarter 2021 adjusted earnings of $1.30 per share, declining 54% from $2.83 in the year-ago quarter. The bottom line topped the Zacks Consensus Estimate of 83 cents. Higher-than-expected EBIT across all segments led to the outperformance.
In the reported quarter, net sales declined 13.8% from the prior-year quarter to $9,110 million but topped the consensus mark of $8,940.8 million.
Magna International Inc. Price, Consensus and EPS Surprise
Magna International Inc. price-consensus-eps-surprise-chart | Magna International Inc. Quote
Segmental Performance
The Body Exteriors & Structures segment’s revenues in the reported quarter were $3,620 million, declining 18% year over year, affected by lower global light vehicle production and production disruptions brought about by the global semiconductor chip shortage. The figure missed the consensus mark of $3,624 million. Consequently, the segment reported adjusted EBIT of $168 million, down 69% from the year-ago period amid lower margins on reduced sales, labor and other operational inefficiencies due to semiconductor chip shortages and higher costs of production, commodity and energy costs. The adjusted EBIT, however, topped the consensus figure of $140 million.
In the reported quarter, the Power & Vision segment revenues edged down 12% to $2,804 million from the prior-year figure. Lower global light vehicle production led by production disruptions due to chip shortages and net customer price concessions led to the downside. The figure topped the consensus mark of $2,782 million. Low margins and operational inefficiencies in the quarter resulted in a 52% decline in segmental EBIT of $171 million. The figure outpaced the consensus mark of $112 million.
Revenues in the Seating Systems segment fell 7% year over year to $1,299 million in the reported quarter, led by lower global light vehicle production and the impact of production disruptions due to semiconductor chip shortages. The figure topped the consensus mark of $1,147 million. The segment reported adjusted EBIT of $49 million, down 42% from the corresponding quarter of 2020. The figure topped the consensus estimate of $19 million.
The Complete Vehicles segment’s revenues decreased 14% year over year to $1,511 million, amid lower assembly volumes and a weak Euro. The figure, however, crossed the consensus mark of $1,504 million. Adjusted EBIT declined 11% year over year to $98 million due to lower earnings on reduced engineering and assembly sales, including labor inefficiencies due to semiconductor chip shortages. The figure topped the consensus mark of $68 million.
Financials
Magna had $2,948 million cash and cash equivalents as of Dec 31, 2021. It had long-term debt of $3,538 million, down from $3,973 million in the year-ago quarter. In the reported quarter, cash provided from operating activities totaled $1,351 million, declining from the year-ago figure of $2,259 million.
During the quarter, MGA returned $378 million to shareholders through share repurchases and dividends. It repurchased 3.1 million shares for $251 million and paid out dividends of $127 million.
It has also raised quarterly cash dividend by 5% to 45 cents per share, payable on Mar 11, 2022, to shareholders of record as of the close of business on Feb 25, 2022.
Outlook for 2022
Magna expects full-year 2022 revenues in the band of $38.8-$40.4 billion. Adjusted EBIT margin is anticipated to be 6-6.4%. The company envisions capital spending of nearly $1.8 billion in 2022.
Zacks Rank & Key Picks
Currently, Magna has a Zacks Rank #4 (Sell).
Some better-ranked players in the auto space are Tesla (TSLA - Free Report) , sporting a Zacks Rank #1(Strong Buy) and Goodyear Tire (GT - Free Report) and Genuine Parts (GPC - Free Report) , each carrying a Zacks Rank #2 (Buy) currently. You can see the complete list of today’s Zacks #1 Rank stocks here.
Tesla has an expected earnings growth rate of 35.21% for the current year. The Zacks Consensus Estimate for current-year earnings has been revised around 5% upward over the past 60 days.
Tesla’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters. TSLA pulled off a trailing four-quarter earnings surprise of 25.38%, on average. The stock has also rallied 5.4% over a year.
Goodyear has an expected earnings growth rate of 51.7% for the current year. The Zacks Consensus Estimate for current-year earnings has been revised around 1.1% upward over the past 60 days.
Goodyear’s earnings beat the Zacks Consensus Estimate in all of the trailing four quarters. GT pulled off a trailing four-quarter earnings surprise of 228.5%, on average. The stock has also rallied 12.1% over a year.
Genuine Parts has an expected earnings growth rate of 10.03% for the current year. The Zacks Consensus Estimate for earnings for the current year has been revised around 2.2% upward over the past 60 days.
Genuine Parts’ earnings beat the Zacks Consensus Estimate in all the trailing four quarters. GPC pulled off a trailing four-quarter earnings surprise of around 16%, on average. The stock has also rallied 27.6% over a year.