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Why Is Magna International (MGA) Down 2.9% Since Its Last Earnings Report?
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A month has gone by since the last earnings report for Magna International Inc. (MGA - Free Report) . Shares have lost about 2.9% in that time frame.
Will the recent negative trend continue leading up to its next earnings release, or is MGA due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Magna Q4 Earnings & Revenues Drive Past Estimates
Magna International reported fourth-quarter 2017 adjusted earnings per share of $1.57, surpassing the Zacks Consensus Estimate by a cent. The bottom line also improved 20% from $1.31 recorded in the same period of 2016.
Sales increased 12% year over year to $10.39 billion. The top line also surpassed the Zacks Consensus Estimate of $9.96 billion. The rise in sales is primarily owing to an appreciable rise in company’s complete vehicle-assembly sales, which includes the production of BMW 5-Series and Jaguar E-Pace at the Graz, Austria assembly plant.
Moreover, the company reported a 16% increase in adjusted EBIT to $809 million from the year-ago figure of $696 million.
Full-Year 2017 Results
Magna International reported adjusted earnings to be $5.96 per share in 2017, up from $5.23 in 2016. The Zacks Consensus Estimate for earnings was $5.96 per share.
In 2017, sales increased to $38.95 billion from $36.45 billion in 2016. The figure also surpassed Zacks Consensus Estimate of $37.51 billion.
Regional Performances
In North America, External Production sales were $4.9 billion, almost in line with the prior-ago quarter. However, Tooling, Engineering & Other sales rose 8% to $388 million. Total sales in the region were $5.3 billion, almost in line with fourth-quarter 2016.
In Europe, External Production sales rallied 23% to $2.7 billion while Tooling, Engineering & Other sales increased 2% to $593 million. Also, the region’s Complete Vehicle Assembly sales rose 129% to $1 billion from the prior-year quarter. Total sales in the region gained 34% year over year to $4.3 billion.
In Asia, External Production sales slumped 3% to $644 million while Tooling, Engineering & Other sales increased 34% to $794 million. Total sales in the region were up 2% year over year to $794 million.
In Rest of World, External Production sales gained 15% to $153 million, whereas Tooling, Engineering & Other sales declined 36% to $7 million. Total sales in the region rallied 11% year over year to $160 million.
Financials
Magna International had $726 million of cash and cash equivalents as of Dec 31, 2017, compared with $974 million as of Dec 31, 2016. The company had a long-term debt of $3.2 billion as of Dec 31, 2017, up from $2.4 billion recorded on Dec 31, 2016.
At the end of fourth-quarter 2017, Magna International’s cash flow from operations was $1.4 billion in comparison to $1.7 billion recorded in the fourth quarter of prior year.
Capital Deployment
The company’s board of directors has announced a quarterly dividend of 20% to 33 cents per share for the fourth quarter. This dividend is payable on Mar 23, 2018, to shareholders of record as of Mar 9, 2018.
During the quarter, Magna International repurchased 6.7 million shares for $366 million. In 2017, it repurchased total 26.2 million for $1.27 billion and paid a total cash dividend of $400 million.
Outlook
For 2018, the company expects light-vehicle production in North America to be around 17.4 million units. For Europe, it is expected to be in the range of 22.3-22.4 million compared with the previous anticipation of 22.3 million. Moreover, Magna International anticipates total sales in the range of $39.3-$41.5 billion, which includes Complete Vehicle sales in the band of $6-$6.4 billion.
Income tax rate is projected in the range of 22-23%. Also, capital spending is anticipated to be approximately $1.8 billion.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. There have been two revisions lower for the current quarter.
At this time, MGA has a great Growth Score of A, though it is lagging a lot on the momentum front with a D. The stock was also allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Zacks' style scores indicate that the company's stock is suitable for value and growth investors.
Outlook
Estimates have been broadly trending downward for the stock and the magnitude of these revisions indicates a downward shift. Notably, MGA has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is Magna International (MGA) Down 2.9% Since Its Last Earnings Report?
A month has gone by since the last earnings report for Magna International Inc. (MGA - Free Report) . Shares have lost about 2.9% in that time frame.
Will the recent negative trend continue leading up to its next earnings release, or is MGA due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Magna Q4 Earnings & Revenues Drive Past Estimates
Magna International reported fourth-quarter 2017 adjusted earnings per share of $1.57, surpassing the Zacks Consensus Estimate by a cent. The bottom line also improved 20% from $1.31 recorded in the same period of 2016.
Sales increased 12% year over year to $10.39 billion. The top line also surpassed the Zacks Consensus Estimate of $9.96 billion. The rise in sales is primarily owing to an appreciable rise in company’s complete vehicle-assembly sales, which includes the production of BMW 5-Series and Jaguar E-Pace at the Graz, Austria assembly plant.
Moreover, the company reported a 16% increase in adjusted EBIT to $809 million from the year-ago figure of $696 million.
Full-Year 2017 Results
Magna International reported adjusted earnings to be $5.96 per share in 2017, up from $5.23 in 2016. The Zacks Consensus Estimate for earnings was $5.96 per share.
In 2017, sales increased to $38.95 billion from $36.45 billion in 2016. The figure also surpassed Zacks Consensus Estimate of $37.51 billion.
Regional Performances
In North America, External Production sales were $4.9 billion, almost in line with the prior-ago quarter. However, Tooling, Engineering & Other sales rose 8% to $388 million. Total sales in the region were $5.3 billion, almost in line with fourth-quarter 2016.
In Europe, External Production sales rallied 23% to $2.7 billion while Tooling, Engineering & Other sales increased 2% to $593 million. Also, the region’s Complete Vehicle Assembly sales rose 129% to $1 billion from the prior-year quarter. Total sales in the region gained 34% year over year to $4.3 billion.
In Asia, External Production sales slumped 3% to $644 million while Tooling, Engineering & Other sales increased 34% to $794 million. Total sales in the region were up 2% year over year to $794 million.
In Rest of World, External Production sales gained 15% to $153 million, whereas Tooling, Engineering & Other sales declined 36% to $7 million. Total sales in the region rallied 11% year over year to $160 million.
Financials
Magna International had $726 million of cash and cash equivalents as of Dec 31, 2017, compared with $974 million as of Dec 31, 2016. The company had a long-term debt of $3.2 billion as of Dec 31, 2017, up from $2.4 billion recorded on Dec 31, 2016.
At the end of fourth-quarter 2017, Magna International’s cash flow from operations was $1.4 billion in comparison to $1.7 billion recorded in the fourth quarter of prior year.
Capital Deployment
The company’s board of directors has announced a quarterly dividend of 20% to 33 cents per share for the fourth quarter. This dividend is payable on Mar 23, 2018, to shareholders of record as of Mar 9, 2018.
During the quarter, Magna International repurchased 6.7 million shares for $366 million. In 2017, it repurchased total 26.2 million for $1.27 billion and paid a total cash dividend of $400 million.
Outlook
For 2018, the company expects light-vehicle production in North America to be around 17.4 million units. For Europe, it is expected to be in the range of 22.3-22.4 million compared with the previous anticipation of 22.3 million. Moreover, Magna International anticipates total sales in the range of $39.3-$41.5 billion, which includes Complete Vehicle sales in the band of $6-$6.4 billion.
Income tax rate is projected in the range of 22-23%. Also, capital spending is anticipated to be approximately $1.8 billion.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. There have been two revisions lower for the current quarter.
Magna International Inc. Price and Consensus
Magna International Inc. Price and Consensus | Magna International Inc. Quote
VGM Scores
At this time, MGA has a great Growth Score of A, though it is lagging a lot on the momentum front with a D. The stock was also allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Zacks' style scores indicate that the company's stock is suitable for value and growth investors.
Outlook
Estimates have been broadly trending downward for the stock and the magnitude of these revisions indicates a downward shift. Notably, MGA has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.