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Magna International Inc MGA

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Morningstar’s Analysis

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Magna Q3 Results Hindered by Chip Crunch, Maintains Adjusted Guidance; Slight FVE Increase to $77

Richard Hilgert Senior Equity Analyst

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.

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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 Sep 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type
Employees 154,000

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