Magna International (MGA) Tops Q3 EPS by 60c, Revenues Beat; Raises FY20 Revenue Guidance Above Consensus
Magna International (NYSE: MGA) reported Q3 EPS of $1.95, $0.60 better than the analyst estimate of $1.35. Revenue for the quarter came in at $9.1 billion versus the consensus estimate of $9.08 billion.
- Sales of $9.1 billion decreased 2%, compared to 4% lower global light vehicle production
- Recorded non-cash impairment charges of $200 million after income taxes and loss attributable to non-controlling interests related to our investment in an equity accounted transmissions joint venture
- Diluted earnings per share of $1.35, compared to diluted loss per share of $0.75 in the third quarter of 2019
- Adjusted diluted earnings per share of $1.95, 38% higher than the third quarter of 2019
- Cash from operating activities of $1.6 billion, compared to $750 million in the third quarter of 2019
- 2020 Outlook increased to reflect higher total Sales and Adjusted EBIT margin expectations
"Following the significant production declines driven by the COVID-19 pandemic in the first half of the year, we began to experience a recovery in production at the end of the second quarter. Our strong third quarter results reflect the actions we have taken to reduce discretionary and structural costs in the face of the lower levels of vehicle production. We expect our cost structure and operating philosophy to continue to drive profitability and returns as vehicle volumes recover, while allowing us to navigate through challenging times.” - Don Walker, Magna’s Chief Executive Officer
| “We are pleased with how quickly we were able to return to stronger margins and free cash flow(2) generation in the third quarter, even at relatively low vehicle production levels. Our updated outlook reflects our expectation of a solid finish to 2020 for Magna.”- Vince Galifi, Magna’s Chief Financial Officer. |
GUIDANCE:
Magna International sees FY2020 revenue of $31.5-32.5 billion, versus the consensus of $31.46 billion.
There continues to be uncertainty related to our outlook above as a result of elevated risks associated with consumer demand, as well as continuing COVID-19 risks to various aspects of our business and the automotive industry, as discussed in our MD&A for the third quarter of 2020, our Annual Information Form / Form 40-F dated March 27, 2020 and subsequent filings.
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