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Magna International Inc Class A MGA

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Economic Moat

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PREMIUM

Magna Lowers Guidance as Q2 Results Take Chip Shortage Hit; Maintaining $73 FVE

Richard Hilgert Senior Equity Analyst

Analyst Note

| Richard Hilgert |

No-moat Magna International reported second-quarter revenue and earnings per share before special items that missed FactSet consensus estimates. Revenue increased 110% year over year to $9.0 billion from $4.3 billion in the heavily COVID-19-affected year-ago period but was roughly $240 million below consensus. Compared with the first quarter of 2021, revenue declined 11% from $10.2 billion, while light-vehicle production weighted to Magna’s customer base was down 10%. The sequential revenue decline represented 1 percentage point of underperformance compared with customer production, which was sporadic due to the chip shortage. EPS of $1.40 was $0.12 below the $1.52 consensus, up $3.12 from the $1.71 loss reported a year ago and down $0.46 from the first quarter.

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Company Profile

Business Description

Magna International prides itself on a highly entrepreneurial culture and a corporate constitution that outlines distribution of profits to various stakeholders. This automotive supplier's product groups include exteriors, interiors, seating, roof systems, body and chassis, powertrain, vision and electronic systems, closure systems, electric vehicle systems, tooling and engineering, and contracted vehicle assembly. Roughly half of Magna's revenue comes from North America while Europe accounts for approximately 44%.

Contact
337 Magna Drive
Aurora, ON, L4G 7K1, Canada
T +1 905 726-2462
Sector Consumer Cyclical
Industry Auto Parts
Most Recent Earnings Jun 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type
Employees 158,000

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