2023-08-04 07:36:06 ET
Magna International ( NYSE: MGA ) soared in early trading on Friday after topping consensus estimates with its Q2 earnings report and setting favorable guidance.
Sales increased 17% to $11.0B during the quarter, which was a stronger pace of sales growth than the 15% increase in global light vehicle production during the quarter.
Magna International ( MGA ) also reported that adjusted EBIT increased to $603M in Q2 from $358M a year ago. The company's focus on operational excellence and cost initiatives was said to have helped drive strong earnings on higher sales. The EBIT increase was also noted to reflects losses in the Russian facilities during the second quarter of 2022, and commercial items in the second quarter of 2023 and 2022, which had a net favorable impact on a year over year basis. EBIT drags during the quarter included higher production input costs net of customer recoveries, higher engineering, launch and other costs, including for the new vehicle assembly business, and acquisitions.
During Q2, Magna ( MGA ) generated cash from operations before changes in operating assets and liabilities of $879M and used $332M in operating assets and liabilities.
Looking ahead, Magna ( MGA ) sees full-year sales of $41.9B to $43.5B vs. a prior range of $40.2B to $41.8B and the consensus estimate of $41.8B.
On Wall Street, Bank of America reiterated a Buy rating on MGA after taking in the earnings beat, which was said to be driven by higher sales and solid execution/margins. "The operating issues MGA experienced in 4Q:22 seem to be largely resolved and new awards for battery enclosures give us confidence that MGA will outperform for years to come," noted analyst John Murphy.
Shares of Magna International ( MGA ) moved 4.66% higher in premarket trading to $66.00 vs. the 52-week range of $45.58 to $68.92.
More on Magna International:
- Buy Industry Leader Magna On The Pullback At 10.5x P/E
- Recent options trades
- Growth metrics on Magna International
- Seeking Alpha's Quant Rating for Magna International
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Magna International rallies 5% after solid execution leads to earnings topper