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UPDATE 3-Canada's Magna raises profit forecast as global auto production improves

(Recasts paragraph 1; adds CEO comment in paragraph 3 and analyst comment in paragraph 10)

By Raechel Thankam Job

May 5 (Reuters) - Canadian auto parts maker Magna International Inc raised its full-year earnings forecast on Friday, betting on increased production of cars and other light vehicles in North America and Europe as supply-chain constraints ease.

Magna also joined peer Aptiv PLC in issuing positive commentary on the supply chain as the auto industry recovers from chip and labor shortages as well as elevated prices for raw materials and freight that had shackled efforts to meet customer demand.

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"We looked at the downtime hours in February (which) was not a lot better than what we saw in Q4. But if you go from March to April, we are starting to see a little bit of improvement," Magna CEO Seetarama Kotagiri said during an analyst call.

Magna expects light vehicle production in North America and Europe, its two largest markets, to grow to 15 million units and 16.3 million units, respectively. That's a slight improvement from its previous projection of 14.9 mln for North America and 16.2 mln for Europe.

To mitigate inflationary pressures, the company is also undertaking restructuring measures, such as consolidating certain corporate functions.

U.S.-listed shares of Magna, which makes powertrains and other parts for carmakers and counts General Motors and Ford Motor Co as customers, rose 5% in morning trade.

Ontario-based Magna raised its 2023 profit forecast to a range of $1.3 billion to $1.5 billion from a range of $1.1 billion to $1.4 billion. It also raised its revenue forecast.

On an adjusted basis, the company reported earnings per share of $1.11 for the first quarter, beating analysts' estimates of 83 cents.

Sales of $10.67 billion also topped expectations of $9.86 billion, according to Refinitiv data.

Magna's beat reverses an "ugly streak" of three straight bottom-line shortfalls and may have positive implications for the broader sub-industry, CFRA analyst Garrett Nelson said.

(Reporting by Raechel Thankam Job and Nathan Gomes; Editing by Sriraj Kalluvila and Anil D'Silva)