Magna misses profit estimates, cuts annual sales forecast on supply chain issues
03/05/2024 11:39
May 3 (Reuters) - Canada's Magna International MG.TO
missed analysts' estimates for first-quarter profit and cut its
full-year overall sales forecast on Friday, as the auto parts
supplier navigates headwinds from supply chain snags.
The Aurora, Ontario-based company also recorded asset
impairments and restructuring costs of $316 million related to
troubled electric-vehicle startup Fisker.
Magna, which produces powertrains, along with assembling
complete vehicles, signed agreements with Fisker in 2020 to
engineer and manufacture its Ocean SUV.
Fisker has been grappling with mounting uncertainties after
talks with a large automaker for a potential investment
collapsed in March.
Peer Aptiv APTV.N also cut its annual sales forecast on
Thursday and said it would reduce equity interest in its
self-driving joint venture, Motional, with Hyundai Motor
005380.KS .
Auto parts suppliers have been struggling with
lower-than-expected demand for their EV components as carmakers
shift their focus toward producing affordable hybrids.
Supply chain constraints, coupled with labor shortages which
began during the pandemic, also continue to impact the auto
industry as they try to ramp up production.
Magna said it expects full-year 2024 sales of $42.6 billion
to $44.2 billion, compared with its prior forecast range of
$43.8 billion to $45.4 billion.
On an adjusted basis, it earned $1.08 per share in the first
quarter, compared with analysts' average estimate of $1.24 per
share, according to LSEG data.
(Reporting by Nathan Gomes in Bengaluru; Editing by Shilpi
Majumdar)
((Nathan.Gomes@thomsonreuters.com))