Analyst Note| Richard Hilgert |
No-moat Magna International reported third-quarter revenue and earnings per share before special items that missed FactSet consensus estimates. Revenue decreased 13% year over year to $7.9 billion from $9.1 billion last year due to the chip crunch that caused sporadic customer production. As a result, sales were roughly 12% below consensus. Organic revenue, excluding favorable currency translation, declined 17%, outperforming an 18% drop in global light vehicle production weighted to Magna’s customer base by only 1 percentage point. EPS of $0.56 was $0.84 below the $1.40 consensus and down $1.39 from $1.95 reported a year ago.