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Magna (MGA) Tops Q1 Earnings Estimates, Trims '22 Guidance

Zacks Equity Research
·4 min read

Magna International MGA reported first-quarter 2022 adjusted earnings of $1.28 per share, which declined 31.2% on a year-over-year basis. The bottom line, however, topped the Zacks Consensus Estimate of $1.05 a share. Higher-than-expected EBIT across all segments led to the outperformance. In the reported quarter, net sales declined 5% from the prior-year quarter to $9,642 million but surpassed the consensus mark of $8,881 million.

Magna International Inc. Price, Consensus and EPS Surprise

Magna International Inc. Price, Consensus and EPS Surprise
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 $4,077 million, inching up 1% year over year on the back of new program launches. The figure also outpaced the consensus mark of $3,686 million. Consequently, the segment reported an adjusted EBIT of $229 million, down 30% from the year-ago period amid chip woes, high manufacturing costs and unfavorable forex translations. The adjusted EBIT, however, topped the consensus mark of $204 million.

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In the reported quarter, the Power & Vision segment revenues edged down 3% to $3,046 million from the prior-year figure. Lower global light vehicle production led by production disruptions due to chip shortages and net customer price concessions resulted in the downside. The figure, however, topped the consensus mark of $2,740 million. High commodity costs and operational inefficiencies in the quarter resulted in a 48% decline in segmental EBIT of $154 million. The metric outpaced the consensus mark of $106 million.

Revenues in the Seating Systems segment increased 6% year over year to $1,376 million in the reported quarter amid the launch of new programs subsequent to Q1’21. The figure topped the consensus mark of $1,239 million. The segment reported an adjusted EBIT of $49 million, down 11% from the corresponding quarter of 2021 due to lower global light vehicle production and adverse forex translations. The metric topped the consensus estimate of $40.28 million.

The Complete Vehicles segment’s revenues decreased 31% year over year to $1,275 million, amid lower assembly volumes and a weak euro. The figure also missed the consensus mark of $1,427 million. Adjusted EBIT declined 38% year over year to $50 million due to lower LVP and high commodity costs. The metric topped the consensus mark of $42.69 million.

Financials

Magna had $1,996 million and $3,501 million of cash/cash equivalents and long-term debt, respectively, as of Mar 31, 2022. In the reported quarter, cash provided from operating activities totaled $180 million, declining from the year-ago figure of $661 million.

During the quarter, MGA returned $516 million to shareholders through share repurchases and dividends. It repurchased 5.8 million shares for $383 million and paid out dividends of $133 million. The company declared a first-quarter dividend of 45 cents a share, payable on May 27, 2022 to shareholders of record as of May 13, 2022.

Updated 2022 Guidance

Magna now expects full-year 2022 revenues in the band of $37.3-$38.9 billion, down from the previously guided range of $38.8-$40.4 billion. Adjusted EBIT margin is anticipated to be 5-5.4%, down from the prior forecast of 6-6.4%. This Zacks Rank #5 (Strong Sell) company envisions capital spending of nearly $1.8 billion in 2022.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Peer Releases

Here are the key takeaways from the earnings releases of MGA peers including Autoliv ALV and Oshkosh Corporation OSK.

Autoliv reported first-quarter 2022 adjusted earnings of 45 cents per share, lagging the Zacks Consensus Estimate of $1.29. The bottom line fell 75% from $1.79 per share recorded in the year-ago quarter. The company reported net sales of $2,124 million in the quarter, which missed the Zacks Consensus Estimate of $2,226.7 million. The top line also declined 5.26% from the prior year’s $2,242 million.

ALV currently carries a Zacks Rank #5.

Oshkosh reported first-quarter 2022 earnings of 24 cents per share, beating the Zacks Consensus Estimate of 17 cents per share. The bottom line, however, fell from the year-ago reported earnings of $1.13 a share. Revenues of $1,946 million outpaced the consensus mark of $1,874 million and also surged 23.4% on a year-over-year basis.

OSK currently carries a Zacks Rank #5.


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