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Magna International (MGA) Q4 Earnings Lag, Revenues Top
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Magna International Inc. (MGA - Free Report) reported fourth-quarter 2016 earnings per share of $1.24 that missed the Zacks Consensus Estimate of $1.38. Earnings also improved 4.2% from $1.19 recorded in the fourth quarter of 2015.
Revenues increased 8% year over year to $9.25 billion and steered past the Zacks Consensus Estimate of $9.22 billion as well.
Vehicle production dropped 4% to 4.4 million units in North America and 4% to 5.3 million units in Europe.
Magna International, Inc. Price, Consensus and EPS Surprise
Magna International reported 2016 record earnings per share of $5.16 that missed the Zacks Consensus Estimate of $5.28. Earnings improved 9.3% from $4.72 recorded in the fourth quarter of 2015.
Revenues increased 13% year over year to a fiscal record of $36.4 billion but missed the Zacks Consensus Estimate of $36.5 billion.
Segment Details
Revenues at the External Production segment (comprising North America, Europe, Asia, and Rest of World or ROW units) rose 11.6% year over year to $7.88 billion in the reported quarter.
Sales in North America climbed 4% to $4.87 billion, driven by product launches and the acquisition of Getrag that contributed $137 million to sales. Revenues from Europe rose 20% year over year to of $2.20 billion, backed by new product launches and benefits from acquisitions. Revenues from Asia jumped 40% to of $663 million. The rise was aided by the launch of new programs, primarily in China along with benefits from acquisitions. Revenues from ROW rose 53% to $133 million due to the launch of new programs, primarily in Brazil, and higher net customer prices.
Revenues at the Complete Vehicle Assembly segment totaled $439 million, down 30% from $628 million a year ago. Moreover, assembly volumes declined 70% to 7,418 units.
Revenues from the Tooling, Engineering & Other segment increased 7% to $936 million in the quarter under review.
Financials
Magna International had $974 million of cash and cash equivalents as of Dec 31, 2016, compared with $2.9 billion as of Dec 31, 2015. The company had long-term debt of $2.5 billion as of Dec 31, 2016, compared with $2.6 billion as of Dec 31, 2015.
In 2016, Magna International’s cash flow from operations increased to $3.4 billion from $2.3 billion a year ago.
Capital Deployment
On Feb 23, 2017, the board of directors of the company raised the quarterly dividend by 10% to 27.5 cents from 25 cents per share. This dividend is payable on Mar 24, to shareholders on record as of Mar 10, 2017. With this, the company increased dividend for eight consecutive months.
In 2016, Magna International repurchased 22.6 million shares for $913 million.
Outlook
For 2017, Magna International projects revenues from the External Production segment in the band of $30.4–$31.7 billion. Meanwhile, Complete Vehicle Assembly sales are projected in the range of $2.7–$3 billion.
Thus, for 2017, the company expects total revenue between $36 billion and $37.7 billion. Tax rate is projected in the range of 25% to 26% while capital expenditures are anticipated at around $2 billion.
Magna International, 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, apart from engineering and assembling complete vehicles, primarily for sale to original equipment manufacturers of cars and light trucks.
Price Performance
Magna International underperformed the Zacks categorized Auto/Truck-Original Equipment Market industry over the last three months. The stock gained 5.4% over this period while the industry saw a 12.8% increase. Share price gained from expansion in emerging markets and acquisitions.
Zacks Rank & Key Picks
Magna International currently carries a Zacks Rank #3 (Hold).
For the current year, Honda, Fox Factory and General Motors expect earnings growth of around 27%, 16.6% and 9.4%, respectively.
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Magna International (MGA) Q4 Earnings Lag, Revenues Top
Magna International Inc. (MGA - Free Report) reported fourth-quarter 2016 earnings per share of $1.24 that missed the Zacks Consensus Estimate of $1.38. Earnings also improved 4.2% from $1.19 recorded in the fourth quarter of 2015.
Revenues increased 8% year over year to $9.25 billion and steered past the Zacks Consensus Estimate of $9.22 billion as well.
Vehicle production dropped 4% to 4.4 million units in North America and 4% to 5.3 million units in Europe.
Magna International, Inc. Price, Consensus and EPS Surprise
Magna International, Inc. Price, Consensus and EPS Surprise | Magna International, Inc. Quote
2016 Results
Magna International reported 2016 record earnings per share of $5.16 that missed the Zacks Consensus Estimate of $5.28. Earnings improved 9.3% from $4.72 recorded in the fourth quarter of 2015.
Revenues increased 13% year over year to a fiscal record of $36.4 billion but missed the Zacks Consensus Estimate of $36.5 billion.
Segment Details
Revenues at the External Production segment (comprising North America, Europe, Asia, and Rest of World or ROW units) rose 11.6% year over year to $7.88 billion in the reported quarter.
Sales in North America climbed 4% to $4.87 billion, driven by product launches and the acquisition of Getrag that contributed $137 million to sales. Revenues from Europe rose 20% year over year to of $2.20 billion, backed by new product launches and benefits from acquisitions. Revenues from Asia jumped 40% to of $663 million. The rise was aided by the launch of new programs, primarily in China along with benefits from acquisitions. Revenues from ROW rose 53% to $133 million due to the launch of new programs, primarily in Brazil, and higher net customer prices.
Revenues at the Complete Vehicle Assembly segment totaled $439 million, down 30% from $628 million a year ago. Moreover, assembly volumes declined 70% to 7,418 units.
Revenues from the Tooling, Engineering & Other segment increased 7% to $936 million in the quarter under review.
Financials
Magna International had $974 million of cash and cash equivalents as of Dec 31, 2016, compared with $2.9 billion as of Dec 31, 2015. The company had long-term debt of $2.5 billion as of Dec 31, 2016, compared with $2.6 billion as of Dec 31, 2015.
In 2016, Magna International’s cash flow from operations increased to $3.4 billion from $2.3 billion a year ago.
Capital Deployment
On Feb 23, 2017, the board of directors of the company raised the quarterly dividend by 10% to 27.5 cents from 25 cents per share. This dividend is payable on Mar 24, to shareholders on record as of Mar 10, 2017. With this, the company increased dividend for eight consecutive months.
In 2016, Magna International repurchased 22.6 million shares for $913 million.
Outlook
For 2017, Magna International projects revenues from the External Production segment in the band of $30.4–$31.7 billion. Meanwhile, Complete Vehicle Assembly sales are projected in the range of $2.7–$3 billion.
Thus, for 2017, the company expects total revenue between $36 billion and $37.7 billion. Tax rate is projected in the range of 25% to 26% while capital expenditures are anticipated at around $2 billion.
Magna International, 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, apart from engineering and assembling complete vehicles, primarily for sale to original equipment manufacturers of cars and light trucks.
Price Performance
Magna International underperformed the Zacks categorized Auto/Truck-Original Equipment Market industry over the last three months. The stock gained 5.4% over this period while the industry saw a 12.8% increase. Share price gained from expansion in emerging markets and acquisitions.
Zacks Rank & Key Picks
Magna International currently carries a Zacks Rank #3 (Hold).
Better-ranked companies in the auto space include Honda Motor Co., Ltd. (HMC - Free Report) , Fox Factory Holding Corp (FOXF - Free Report) and General Motors Company (GM - Free Report) . All the stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
For the current year, Honda, Fox Factory and General Motors expect earnings growth of around 27%, 16.6% and 9.4%, respectively.
A Full-Blown Technological Breakthrough in the Making
Zacks’ Aggressive Growth Strategist Brian Bolan explores autonomous cars in our latest Special Report, Driverless Cars: Your Roadmap to Mega-Profits Today. In addition to who will be selling them and how the auto industry will be impacted, Brian reveals 8 stocks with tremendous gain potential to feed off this phenomenon. Click to see the stocks right now >>