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Magna (MGA) Misses on Q3 Earnings & Sales, Trims '22 View
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Magna International (MGA - Free Report) reported third-quarter 2022 adjusted earnings of $1.07 per share, which jumped 91% on a year-over-year basis. The bottom line, however, lagged the Zacks Consensus Estimate of $1.13 a share. Lower-than-expected EBIT in the Body Exteriors & Structures, Power & Vision and Seating Systems segments led to the underperformance. In the reported quarter, net sales increased 17% from the prior-year quarter to $9,268 million but fell short of the consensus mark of $9,338 million.
Adjusted EBIT of $441 million in the quarter grew 92.5% from the third quarter of 2021 largely attributable to robust sales, favorable commercial settlements and a $45 million provision on contract with Evergrande’s automotive unit in the third quarter of 2021.
Magna International Inc. Price, Consensus and EPS Surprise
The Body Exteriors & Structures segment’s revenues in the reported quarter were $3,976 million, rising 25% year over year due to higher global light vehicle production. The figure, however, missed the consensus mark of $3,881 million. The segment reported an adjusted EBIT of $225 million, rocketing 130% from the year-ago period but lagging the consensus mark of $229 million.
In the reported quarter, the Power & Vision segment revenues increased 16% to $2,911 million from the prior-year figure but missed the consensus mark of $2,923 million. The segmental EBIT of $117 million registered a 75% increase year over year. The metric, however, lagged the consensus mark of $131 million.
Revenues in the Seating Systems segment increased 15% year over year to $1,295 million in the reported quarter but missed the consensus mark of $1,331 million. The segment reported an adjusted EBIT of $35 million, soaring 59% from the corresponding quarter of 2021 but lagging the consensus estimate of $47.89 million.
The Complete Vehicles segment’s revenues decreased 3% year over year to $1,213 million and missed the consensus mark of $1,300 million. Adjusted EBIT, however, was up a whopping 117% from the year-ago period. The metric came in at $65 million and surpassed the Zacks Consensus Estimate of $48.35 million.
Financials
Magna had $1,102 million of cash/cash equivalents as of Sep 30, 2022, down from $2,948 million in 2021-end. Long-term debt, as of Jun 30, 2022, was $3,325 million, down from $3,538 million in 2021-end. In the reported quarter, cash provided from operating activities totaled $238 million, declining from the year-ago figure of $400 million.
During the quarter under review, Magna returned $305 million to shareholders ($125 million in dividends and $180 million in stock buyback). The company declared a third-quarter dividend of 45 cents per common share, payable on Dec 2, 2022, to shareholders on record as of the close of business on Nov 18, 2022.
2022 Guidance Revised
Magna expects full-year 2022 revenues in the band of $37.4-$38.4 billion, down from the previously guided range of $37.6-$39.2 billion. Adjusted EBIT margin is now forecast at 4.8-5% versus 5-5.4% guided earlier. Net income attributable to Magna is expected to be between $1.3 billion and $1.4 billion, narrowed from the previous range of $1.3-$1.5 billion. Capital spending is now envisioned at $1.7 billion, down from $1.8 billion estimated earlier.
MGA carries a Zacks Rank #5 (Strong Sell), currently.
BorgWarnerInc. (BWA - Free Report) : BorgWarner reported adjusted earnings of $1.24 per share for third-quarter 2022, up from 80 cents recorded in the prior-year quarter. The bottom line also beat the Zacks Consensus Estimate of $1.02 per share. The automotive equipment supplier reported net sales of $4,060 million, outpacing the Zacks Consensus Estimate of $3,977 million. The top line also moved up 18.8% year over year.
For full-year 2022, the company anticipates net sales within $15.4-$15.7 billion, indicating year-over-year growth of 12-14%. Importantly, BorgWarner envisions electric vehicle revenues of around $850 million for 2022, doubling from 2021 levels. Adjusted operating margin is expected in the band of 10-12%. Adjusted net earnings are estimated to be within $4.25-$4.45 share. Free cash flow is projected in the band of $650-$750 million.
Allison TransmissionHoldings (ALSN - Free Report) : Allison posted third-quarter earnings of $1.45 a share, which topped the Zacks Consensus Estimate of $1.31. The bottom line increased 63% on a year-over-year basis. Quarterly revenues of $710 million grew 25% from the year-ago period and crossed the consensus mark of $691 million.
Allison modified its full-year 2022 guidance. It now estimates net sales in the band of $2,690-$2,740 million compared with the prior range of $2,650-$2,750 million. Net income is now expected in the band of $490-$510 million, up from the prior estimate of $450-$500 million. Adjusted EBITDA is now estimated within $915-$945 million compared with $885-$955 million previously. Adjusted free cash flow is now estimated within $460-$480 million compared with $420-$480 million projected previously. Its net cash provided by operating activities is expected to be within $620-$650 million, compared with $590-$660 million expected previously.
Autoliv Inc. (ALV - Free Report) : Autoliv reported third-quarter 2022 adjusted earnings of $1.23 per share, missing the Zacks Consensus Estimate of $1.37. The bottom line, nevertheless, shot up 68% on a year-over-year basis. The company reported net sales of $2,302 million for the quarter, which missed the Zacks Consensus Estimate of $2,344 million. The top line, however, soared 25% year over year.
The company forecasts full-year 2022 organic sales growth of around 15%, compared with 13-16% guided previously. Adjusted operating margin is now anticipated within the higher end of 6-7%. Operating cash flow expectations have been brought down to the band of $700-$750 million from $750-$850 million forecast earlier. The projection for capex, net, of sales, remains unchanged at around 5.5%.
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Magna (MGA) Misses on Q3 Earnings & Sales, Trims '22 View
Magna International (MGA - Free Report) reported third-quarter 2022 adjusted earnings of $1.07 per share, which jumped 91% on a year-over-year basis. The bottom line, however, lagged the Zacks Consensus Estimate of $1.13 a share. Lower-than-expected EBIT in the Body Exteriors & Structures, Power & Vision and Seating Systems segments led to the underperformance. In the reported quarter, net sales increased 17% from the prior-year quarter to $9,268 million but fell short of the consensus mark of $9,338 million.
Adjusted EBIT of $441 million in the quarter grew 92.5% from the third quarter of 2021 largely attributable to robust sales, favorable commercial settlements and a $45 million provision on contract with Evergrande’s automotive unit in the third quarter of 2021.
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 $3,976 million, rising 25% year over year due to higher global light vehicle production. The figure, however, missed the consensus mark of $3,881 million. The segment reported an adjusted EBIT of $225 million, rocketing 130% from the year-ago period but lagging the consensus mark of $229 million.
In the reported quarter, the Power & Vision segment revenues increased 16% to $2,911 million from the prior-year figure but missed the consensus mark of $2,923 million. The segmental EBIT of $117 million registered a 75% increase year over year. The metric, however, lagged the consensus mark of $131 million.
Revenues in the Seating Systems segment increased 15% year over year to $1,295 million in the reported quarter but missed the consensus mark of $1,331 million. The segment reported an adjusted EBIT of $35 million, soaring 59% from the corresponding quarter of 2021 but lagging the consensus estimate of $47.89 million.
The Complete Vehicles segment’s revenues decreased 3% year over year to $1,213 million and missed the consensus mark of $1,300 million. Adjusted EBIT, however, was up a whopping 117% from the year-ago period. The metric came in at $65 million and surpassed the Zacks Consensus Estimate of $48.35 million.
Financials
Magna had $1,102 million of cash/cash equivalents as of Sep 30, 2022, down from $2,948 million in 2021-end. Long-term debt, as of Jun 30, 2022, was $3,325 million, down from $3,538 million in 2021-end. In the reported quarter, cash provided from operating activities totaled $238 million, declining from the year-ago figure of $400 million.
During the quarter under review, Magna returned $305 million to shareholders ($125 million in dividends and $180 million in stock buyback). The company declared a third-quarter dividend of 45 cents per common share, payable on Dec 2, 2022, to shareholders on record as of the close of business on Nov 18, 2022.
2022 Guidance Revised
Magna expects full-year 2022 revenues in the band of $37.4-$38.4 billion, down from the previously guided range of $37.6-$39.2 billion. Adjusted EBIT margin is now forecast at 4.8-5% versus 5-5.4% guided earlier. Net income attributable to Magna is expected to be between $1.3 billion and $1.4 billion, narrowed from the previous range of $1.3-$1.5 billion. Capital spending is now envisioned at $1.7 billion, down from $1.8 billion estimated earlier.
MGA carries a Zacks Rank #5 (Strong Sell), currently.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Peer Releases
BorgWarner Inc. (BWA - Free Report) : BorgWarner reported adjusted earnings of $1.24 per share for third-quarter 2022, up from 80 cents recorded in the prior-year quarter. The bottom line also beat the Zacks Consensus Estimate of $1.02 per share. The automotive equipment supplier reported net sales of $4,060 million, outpacing the Zacks Consensus Estimate of $3,977 million. The top line also moved up 18.8% year over year.
For full-year 2022, the company anticipates net sales within $15.4-$15.7 billion, indicating year-over-year growth of 12-14%. Importantly, BorgWarner envisions electric vehicle revenues of around $850 million for 2022, doubling from 2021 levels. Adjusted operating margin is expected in the band of 10-12%. Adjusted net earnings are estimated to be within $4.25-$4.45 share. Free cash flow is projected in the band of $650-$750 million.
Allison Transmission Holdings (ALSN - Free Report) : Allison posted third-quarter earnings of $1.45 a share, which topped the Zacks Consensus Estimate of $1.31. The bottom line increased 63% on a year-over-year basis. Quarterly revenues of $710 million grew 25% from the year-ago period and crossed the consensus mark of $691 million.
Allison modified its full-year 2022 guidance. It now estimates net sales in the band of $2,690-$2,740 million compared with the prior range of $2,650-$2,750 million. Net income is now expected in the band of $490-$510 million, up from the prior estimate of $450-$500 million. Adjusted EBITDA is now estimated within $915-$945 million compared with $885-$955 million previously. Adjusted free cash flow is now estimated within $460-$480 million compared with $420-$480 million projected previously. Its net cash provided by operating activities is expected to be within $620-$650 million, compared with $590-$660 million expected previously.
Autoliv Inc. (ALV - Free Report) : Autoliv reported third-quarter 2022 adjusted earnings of $1.23 per share, missing the Zacks Consensus Estimate of $1.37. The bottom line, nevertheless, shot up 68% on a year-over-year basis. The company reported net sales of $2,302 million for the quarter, which missed the Zacks Consensus Estimate of $2,344 million. The top line, however, soared 25% year over year.
The company forecasts full-year 2022 organic sales growth of around 15%, compared with 13-16% guided previously. Adjusted operating margin is now anticipated within the higher end of 6-7%. Operating cash flow expectations have been brought down to the band of $700-$750 million from $750-$850 million forecast earlier. The projection for capex, net, of sales, remains unchanged at around 5.5%.