Magna (MGA) Earnings Surpass Estimates In Q4, Improve Y/Y

Magna International Inc. (NYSE:MGA) delivered adjusted earnings per share of $1.63 in fourth-quarter 2018, beating the Zacks Consensus Estimate of $1.60. Further, the bottom line was higher than the year-ago quarter’s figure of $1.58.

Revenues increased 5% year over year to $10.1 billion. Also, the top line surpassed the Zacks Consensus Estimate by 0.44%. Robust sales growth was achieved in a period when global light-vehicle production declined 4%, led by a 14% decline in China and a 1% fall in Europe, partly offset by 1% rise in North America.

Adjusted EBIT declined to $730 million from the year-ago figure of $813 million.

2018 Results

For 2018, adjusted earnings per share were $6.71, up from the 2017 figure of $5.93.

Revenues for the year were $40.8 billion, up from the 2017 figure of $36.6 billion.

Segmental Performances

Revenues at the Body Exteriors & Structures segment was $4.2 billion in the reported quarter compared with $4.3 billion recorded in fourth-quarter 2017. Adjusted EBIT declined 1% year over year to $351 million.

Revenues at the Power & Vision segment totaled $3 billion in comparison with $2.9 billion recorded in the prior-year quarter. Adjusted EBIT declined 21% year over year to $253 million.

Revenues at the Seating Systems segment totaled $1.44 billion compared with $1.3 billion in the year-ago quarter. Adjusted EBIT increased 4% year over year to $110 million.

Revenues from the Complete Vehicles segment increased to $1.69 billion in the quarter under review from $1.21 million in fourth-quarter 2017. Adjusted EBIT declined 14% year over year to $24 million.

Financials

Magna had $802 million of cash and cash equivalents as of Dec 31, 2018, compared with $839 million as of Dec 31, 2017. The company had long-term debt of $3.1 billion as of Dec 31, 2018, compared with $3.2 billion recorded as of Dec 31, 2017.

At the end of fourth-quarter 2018, Magna’s cash flow from operations was $1.6 billion in comparison with $1.5 billion recorded in the fourth quarter of 2017.

Capital Deployment

The company’s board of directors announced that they increased the dividend rate by 11% to 36.5 cents per share for the fourth quarter. This dividend will be paid on Mar 22, 2019, to shareholders of record as of Mar 8, 2019.

During the reported quarter, Magna repurchased 9.9 million shares for $479 million.

Zacks Rank & Stocks to Consider

Magna currently carries a Zacks Rank #3 (Hold).

A few better-ranked stocks in the auto space are General Motors Company (NYSE:GM) , Honda Motor Co., Ltd. (NYSE:HMC) and Oshkosh Corporation (NYSE:OSK) , each currently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

General Motors has an expected long-term growth rate of 8.5%. The company’s stock has seen the Zacks Consensus Estimate for earnings in 2019 being revised 3.7% upward over the past 30 days.

Honda has an expected long-term growth rate of 2.9%. The company’s stock has seen the Zacks Consensus Estimate for earnings in fiscal 2019 being revised 4.3% upward over the past 30 days.

Oshkosh has an expected growth rate of 11.3%. The company’s stock has seen the Zacks Consensus Estimate for earnings in fiscal 2019 being revised 5.8% upward over the past 30 days.

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Magna International Inc. (MGA): Free Stock Analysis Report

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