Canada's Martinrea Q2 revenue misses, hurt by lower OEM production volumes
Canada's Martinrea Q2 revenue misses, hurt by lower OEM production volumes
Overview
Canada automotive parts supplier's Q2 revenue declined 5.9% yr/yr, missing analyst expectations
Q2 adjusted EPS beat analyst expectations
Company declared C$0.05 per share dividend and repurchased shares during Q2
Outlook
Martinrea reaffirms 2026 outlook: total sales of C$4.5 bln to C$4.9 bln
Company expects 2026 adj operating income margin of 5.5% to 6.0%
Martinrea sees 2026 free cash flow of C$125 mln to C$175 mln
Result Drivers
LOWER PRODUCTION VOLUMES - Co said sales decline was driven by lower OEM production volumes and program terminations, especially Ford Escape and certain electric vehicle platforms
HIGHER ALUMINUM COSTS - Co said adjusted operating income margin was down year-over-year due to higher aluminum costs related to the Middle East situation
UNFAVORABLE FX IMPACT - Co said foreign exchange negatively affected sales in North America and Europe
Company press release: ID:nGNX3b23j2
Key Details
Metric | Beat/Miss | Actual | Consensus Estimate |
Q2 Sales | Miss | C$1.20 bln | C$1.23 bln (5 Analysts) |
Q2 Adjusted EPS | Beat | C$0.61 | C$0.58 (5 Analysts) |
Q2 Adjusted EBITDA | Miss | C$147.20 mln | C$151.28 mln (4 Analysts) |
Q2 Dividend |
| C$0.05 |
|
Analyst Coverage
The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 4 "strong buy" or "buy", 1 "hold" and no "sell" or "strong sell"
The average consensus recommendation for the auto, truck & motorcycle parts peer group is "buy"
Wall Street's median 12-month price target for Martinrea International Inc is C$13.75, about 34.9% above its July 31 closing price of C$10.19
The stock recently traded at 4 times the next 12-month earnings vs. a P/E of 4 three months ago
Reuters Recommended Reads
Aug 4 - Aptiv cuts 2026 sales forecast on weak China demand, delays at customers
Aug 4 - Continental posts Q2 profit beat, but warns of worsening raw material costs
Aug 4 - Core Molding Q2 production revenue falls 1.2% on weak truck demand
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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)