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MGA Q2 Earnings Beat on Power & Vision Unit's Margin Expansion
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Key Takeaways
Magna's adjusted EPS rose 29% to $1.86, while sales increased 3% to $10.98 billion.
Power & Vision EBIT jumped to $245 million as its margin expanded 180 basis points to 6%.
MGA raised 2026 EPS guidance to $6.70-$7.30 and free cash flow view to $1.75-$1.85 billion.
Magna International Inc. (MGA - Free Report) reported second-quarter 2026 adjusted earnings of $1.86 per share, up 29% year over year. The figure surpassed the Zacks Consensus Estimate of $1.53 by 21.57%. Results benefited from productivity gains, operational improvements and tariff recoveries.
Sales increased 3% to $10.98 billion and beat the consensus estimate of $10.74 billion by 2.19%, driven by new program launches, favorable currency translation and improved product mix. Foreign currency movements increased sales by $172 million, while volumes, launches and other factors contributed $273 million.
These benefits were partly offset by the end of certain programs, lower vehicle production in North America, Europe and China, customer price concessions and reduced engineering revenues.
Adjusted EBIT increased 16% year over year to $677 million. The improvement stemmed mainly from productivity and efficiency initiatives, prior restructuring actions, transactional foreign exchange gains and earnings on higher organic sales.
Operational performance, volumes and other factors added about 75 basis points to margin. Lower net tariff costs provided another 25-basis-point benefit as customer recoveries arrived faster than in the prior-year quarter. These gains more than offset unfavorable product mix, higher commodity costs and net adverse commercial items.
Power & Vision Leads Segment Growth
Body Exteriors & Structures sales rose $168 million to $4.42 billion. Adjusted EBIT increased to $360 million from $347 million, while the segment margin slipped 10 basis points to 8.1% due to a slightly unfavorable mix.
Power & Vision sales advanced $236 million to $4.09 billion, while adjusted EBIT jumped to $245 million from $162 million. Its margin expanded 180 basis points to 6%.
Seating Systems sales increased to $1.45 billion, and adjusted EBIT rose to $51 million.
Complete Vehicles sales declined $66 million to $1.16 billion, but adjusted EBIT improved to $37 million from $28 million.
Strong Cash Flow
Cash provided by operating activities reached $954 million, up from $627 million a year earlier. Free cash flow more than doubled to $617 million from $301 million.
Magna returned $598 million to shareholders during the quarter. This included $465 million in share repurchases and $133 million in dividends. The company repurchased 7.4 million shares and ended June with about 9.2 million shares remaining under its current authorization. Total liquidity was nearly $5 billion, including $1.4 billion in cash.
MGA Updates 2026 Expectations
MGA raised its 2026 adjusted earnings guidance to $6.70-$7.30 per share from $6.25-$7.25. The company also updated its adjusted EBIT margin outlook to 6.3%-6.6% from 6%-6.6%.
Free cash flow is now projected at $1.75-$1.85 billion, up from the previous range of $1.6-$1.8 billion. Total sales are expected between $41.3 billion and $42.5 billion, compared with the prior projection of $41.5 billion to $43.1 billion. The sales revision mainly reflects currency movements and the earlier completion of divestitures.
Management expects second-half adjusted earnings of roughly $3.76 per share at the midpoint of its annual outlook. About 40% is projected for the third quarter and 60% for the fourth, when higher sales and margins are anticipated.
Third-quarter revenues are expected to face normal seasonality, model changeovers and the end of programs including the Ford Escape, Toyota Supra and BMW Z4. Still, management expects margins to improve year over year in both remaining quarters. Tariffs are projected to have a broadly neutral full-year impact, while operational excellence initiatives remain the main driver of margin expansion.
Key Releases From the Auto Space
General Motors (GM - Free Report) reported second-quarter 2026 adjusted earnings of $3.57 per share, up 41.3% year over year. The figure beat the Zacks Consensus Estimate of $3.13 by 14.06%. Revenues increased 1.9% to $48.03 billion and surpassed the consensus estimate of $46.56 billion by 3.15%. General Motors raised its full-year adjusted EBIT guidance to $14-$16 billion from $13.5-$15.5 billion. Adjusted earnings are now projected to be $12-$14 per share, up from the prior range of $11.50-$13.50.
Tesla, Inc. (TSLA - Free Report) reported second-quarter 2026 adjusted earnings of 33 cents per share, which declined 17.5% year over year. The figure missed the Zacks Consensus Estimate of 50 cents by 34%. Revenues advanced 25.5% to $28.24 billion and surpassed the consensus estimate of $25.81 billion by 9.41%. Tesla expects 2026 capital expenditures to exceed $25 billion and rise further over the next two to three years.
Ford (F - Free Report) reported second-quarter 2026 adjusted earnings of 42 cents per share, beating the Zacks Consensus Estimate of 33 cents by 27.27%. Earnings rose 13.5% from 37 cents a year ago. Automotive revenues of $44.89 billion fell 4.4% year over year and missed the consensus mark of $45.72 billion by 1.81%. Ford’s consolidated second-quarter revenues came in at $48.3 billion, down 3.7% year over year. The company raised its full-year adjusted EBIT outlook to $10-$11 billion from $8.5-$10.5 billion.
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MGA Q2 Earnings Beat on Power & Vision Unit's Margin Expansion
Key Takeaways
Magna International Inc. (MGA - Free Report) reported second-quarter 2026 adjusted earnings of $1.86 per share, up 29% year over year. The figure surpassed the Zacks Consensus Estimate of $1.53 by 21.57%. Results benefited from productivity gains, operational improvements and tariff recoveries.
Sales increased 3% to $10.98 billion and beat the consensus estimate of $10.74 billion by 2.19%, driven by new program launches, favorable currency translation and improved product mix. Foreign currency movements increased sales by $172 million, while volumes, launches and other factors contributed $273 million.
These benefits were partly offset by the end of certain programs, lower vehicle production in North America, Europe and China, customer price concessions and reduced engineering revenues.
MGA currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Magna International Inc. Price, Consensus and EPS Surprise
Magna International Inc. price-consensus-eps-surprise-chart | Magna International Inc. Quote
Margin Gains Reflect Execution
Adjusted EBIT increased 16% year over year to $677 million. The improvement stemmed mainly from productivity and efficiency initiatives, prior restructuring actions, transactional foreign exchange gains and earnings on higher organic sales.
Operational performance, volumes and other factors added about 75 basis points to margin. Lower net tariff costs provided another 25-basis-point benefit as customer recoveries arrived faster than in the prior-year quarter. These gains more than offset unfavorable product mix, higher commodity costs and net adverse commercial items.
Power & Vision Leads Segment Growth
Body Exteriors & Structures sales rose $168 million to $4.42 billion. Adjusted EBIT increased to $360 million from $347 million, while the segment margin slipped 10 basis points to 8.1% due to a slightly unfavorable mix.
Power & Vision sales advanced $236 million to $4.09 billion, while adjusted EBIT jumped to $245 million from $162 million. Its margin expanded 180 basis points to 6%.
Seating Systems sales increased to $1.45 billion, and adjusted EBIT rose to $51 million.
Complete Vehicles sales declined $66 million to $1.16 billion, but adjusted EBIT improved to $37 million from $28 million.
Strong Cash Flow
Cash provided by operating activities reached $954 million, up from $627 million a year earlier. Free cash flow more than doubled to $617 million from $301 million.
Magna returned $598 million to shareholders during the quarter. This included $465 million in share repurchases and $133 million in dividends. The company repurchased 7.4 million shares and ended June with about 9.2 million shares remaining under its current authorization. Total liquidity was nearly $5 billion, including $1.4 billion in cash.
MGA Updates 2026 Expectations
MGA raised its 2026 adjusted earnings guidance to $6.70-$7.30 per share from $6.25-$7.25. The company also updated its adjusted EBIT margin outlook to 6.3%-6.6% from 6%-6.6%.
Free cash flow is now projected at $1.75-$1.85 billion, up from the previous range of $1.6-$1.8 billion. Total sales are expected between $41.3 billion and $42.5 billion, compared with the prior projection of $41.5 billion to $43.1 billion. The sales revision mainly reflects currency movements and the earlier completion of divestitures.
Management expects second-half adjusted earnings of roughly $3.76 per share at the midpoint of its annual outlook. About 40% is projected for the third quarter and 60% for the fourth, when higher sales and margins are anticipated.
Third-quarter revenues are expected to face normal seasonality, model changeovers and the end of programs including the Ford Escape, Toyota Supra and BMW Z4. Still, management expects margins to improve year over year in both remaining quarters. Tariffs are projected to have a broadly neutral full-year impact, while operational excellence initiatives remain the main driver of margin expansion.
Key Releases From the Auto Space
General Motors (GM - Free Report) reported second-quarter 2026 adjusted earnings of $3.57 per share, up 41.3% year over year. The figure beat the Zacks Consensus Estimate of $3.13 by 14.06%. Revenues increased 1.9% to $48.03 billion and surpassed the consensus estimate of $46.56 billion by 3.15%. General Motors raised its full-year adjusted EBIT guidance to $14-$16 billion from $13.5-$15.5 billion. Adjusted earnings are now projected to be $12-$14 per share, up from the prior range of $11.50-$13.50.
Tesla, Inc. (TSLA - Free Report) reported second-quarter 2026 adjusted earnings of 33 cents per share, which declined 17.5% year over year. The figure missed the Zacks Consensus Estimate of 50 cents by 34%. Revenues advanced 25.5% to $28.24 billion and surpassed the consensus estimate of $25.81 billion by 9.41%. Tesla expects 2026 capital expenditures to exceed $25 billion and rise further over the next two to three years.
Ford (F - Free Report) reported second-quarter 2026 adjusted earnings of 42 cents per share, beating the Zacks Consensus Estimate of 33 cents by 27.27%. Earnings rose 13.5% from 37 cents a year ago. Automotive revenues of $44.89 billion fell 4.4% year over year and missed the consensus mark of $45.72 billion by 1.81%. Ford’s consolidated second-quarter revenues came in at $48.3 billion, down 3.7% year over year. The company raised its full-year adjusted EBIT outlook to $10-$11 billion from $8.5-$10.5 billion.