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AURORA, Ont. — Magna International Inc. said a strong recovery in the global auto sector and massive growth in the Chinese market led to a first-quarter profit of US$615 million, up from US$261 million a year ago as its sales rose 18 per cent.
The Ontario-based auto parts company, which keeps its books in U.S. dollars, said Thursday its profit amounted to US$2.03 per diluted share, up from 86 cents per diluted share in the first three months of 2020.
Sales for the quarter totalled US$10.18 billion, up from $8.66 billion in the same quarter last year.
"Following a challenging 2020 with the negative impact of COVID, particularly in the first half, we are experiencing a recovery in global vehicle demand and corresponding increase in global auto production," Magna CEO Seetarama (Swamy) Kotagiri said.
"Overall, we continued our strong performance in (the first quarter), despite some of the strong challenges we faced."
Magna said the increase in sales came as global light vehicle production rose 18 per cent driven by an 87 per cent increase in China.
On an adjusted basis, Magna said it earned US$1.86 per diluted share, up from an adjusted profit of 86 cents per share last year.
In a revised outlook for the full year, the company said it now expects total sales between US$40.2 billion and US$41.8 billion, up from earlier guidance for between US40.0 billion and US$41.6 billion.
Magna chief financial officer Vince Galifi said sales were further boosted by the acquisition last year of Honglizhixin, a seat supplier to the booming Chinese market.
The company's guidance for net income attributable to Magna was also increased to between US$2.2 billion and US$2.4 billion from between US$2.1 billion and US$$2.3 billion.
Kotagiri said the company continues to be wary of the pandemic and the challenges and potential road bumps it could present, especially with a current shortage of semiconductor chips.
However, he said there's optimism around the auto industry's continued move toward trucks and utility vehicles, which suits their expertise.
Magna also said its in a competitive position for the production of battery enclosures, a part that will be needed on every high-voltage vehicle as the industry continues moving toward electric vehicles.
"We already have two program awards for this technology, and there is a lot more interest in the pipeline," said Kotagiri, saying the company will work on GM's Hummer EV and Ford's F-150 pickup truck EV vehicles.
This report by The Canadian Press was first published May 6, 2021.
Companies in this story: (TSX:MG)
The Canadian Press