Canada's Magna cuts 2026 sales forecast, flags 'uncertain' government policies

Magna International

14/02/2025 11:32

Feb 14 (Reuters) - Canadian auto parts maker Magna
International  MG.TO  cut its 2026 sales estimate while offering
a weak revenue forecast for the current year on Friday and said
challenges such as uncertain government policies have made
forecasting "more difficult".
    U.S.-listed shares of Magna were down 4.1% before the bell.
    The company now expects its 2026 revenue to be between $40.5
billion and $42.6 billion, compared to a forecast of $48.8
billion to $51.2 billion it offered around the same time last
year.
    Aurora, Ontario-based Magna produces vehicle components and
assembles cars at its manufacturing facilities for several top
automakers, including BMW  BMWG.DE , Mazda  7261.T  and Ferrari
 RACE.MI .
    U.S. President Donald Trump suspended his threat of steep
tariffs on Mexico and Canada earlier this month, agreeing to a
30-day pause in return for some concessions.
    But the threat has increased investor focus on results of
Canadian companies such as Magna and Bombardier  BBDb.TO , with
the latter recently delaying offering a 2025 forecast, citing
tariff-related uncertainty.
    The tariff threat has intensified headaches for the Western
auto industry, which is already grappling with rising
competition from Chinese automakers and an inflation-hit
consumer.
    Challenges including light vehicle production volatility and
"uncertain government policies" have made forward-forecasting
more difficult, Magna said on Friday.
    Its 2025 and 2026 forecasts do not incorporate any potential
impact from the imposition of tariffs or changes in tariff
rates, it said.
    The company expects current-year sales to be between $38.6
billion and $40.2 billion, compared with average analysts'
expectation of $42.41 billion, according to data compiled by
LSEG.
    Magna blamed a strong U.S. dollar, lower light-vehicle
production by its customers and the end of Jaguar assembly
production programs for the weak forecast.
    Its fourth-quarter sales rose 2% to $10.63 billion, beating
expectations of $10.30 billion. Adjusted earnings per share of
$1.69 was above the estimate of $1.53 per share.

 (Reporting by Nathan Gomes in Bengaluru; Editing by Pooja
Desai)
 ((Nathan.Gomes@thomsonreuters.com;))