By Kannaki Deka
(Reuters) -Canadian auto parts maker Magna International (NYSE:MGA) Inc on Friday moderately raised its full-year sales forecast, while reporting a lower-than-expected quarterly profit.
U.S.-listed shares of Magna were down 1.3% at $62.9 in morning trade.
A strong demand for vehicles and an increase in prices helped the company post a 3.6% rise in total sales for the quarter, but higher input costs related to energy, labor and freight weighed on its profits.
Chief Executive Officer Seetarama Kotagiri said the outlook revision comes on the back of improvement in production activity and stability in production schedules.
"Dealer vehicle inventories remain low and underlying auto demand is relatively strong and constrained by the tight supply. These factors support improving production levels (in the second half of 2022), particularly as semiconductor availability improves," Kotagiri said.
Magna expects to post full-year sales between $37.6 billion and $39.2 billion, up from its previous outlook of $37.3 billion and $38.9 billion.
"The guidance is based on the same light vehicle production forecasts for North America, Europe, and China as it used in April and we think could prove aggressive," CFRA analyst Garrett Nelson said.
Meanwhile, Magna recorded non-cash impairment charges of $376 million in the quarter, related to its investment in Russia.
The Aurora, Canada-based manufacturer's net sales came in at $9.36 billion, versus analysts' estimates of $9.02 billion, according to Refinitiv data.
Excluding items, it reported a profit of 83 cents per share, short of analysts' estimates of 94 cents per share.