Magna Shares Fall As Profit Miss Overshadows Strong Sales, Higher Outlook – Magna International (NYSE:MGA)

Magna International Inc MGA shares were trading lower on Friday after the first-quarter FY25 earnings.

The company reported a first-quarter revenue decline of 8.2% year-on-year to $10.07 billion, beating the analyst consensus estimate of $9.69 billion.

The lower sales largely reflect a 3% decrease in global light vehicle production, including 8% and 5% lower production in Europe and North America, respectively.

Sales in the Body Exteriors & Structures segment decreased by 10.4%, Power & Vision fell by 5.1%, Seating Systems declined by 9.8%, and Complete Vehicles dropped by 7.7%.

Operating income before income taxes for the quarter was $225 million, with an operating margin of 2.2%.

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Adjusted EBIT was $354 million with an adjusted EBIT margin of 3.5%. Adjusted EPS of $0.78 missed the consensus estimate of $0.90.

The operating cash flow for the quarter totaled $77 million. The company returned $187 million to shareholders, including $136 million in dividends and $51 million in share repurchases in the first quarter.

Magna held $1.05 billion in cash and equivalents as of March 31, 2025.

The company’s board declared a dividend of $0.485 per share, payable on May 30, 2025 to shareholders of record as of the close of business on May 16, 2025.

“In 2024, we successfully drove margin expansion and increased cash flow generation through deliberate actions related to operational excellence, restructuring, reduced capital spending, and commercial recoveries,” said CEO Swamy Kotagiri.

Outlook: Magna raised FY25 sales outlook from $38.6 billion – $40.2 billion to $40.00 billion – $41.60 billion, versus the estimate of $39.27 billion. Magna sees adjusted EBIT margin of 5.1% – 5.6%.

Price Action: MGA shares were down 3.1% at $33.91 at last check Friday.

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