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.