Magna International ( NYSE: MGA ) stock slipped on Friday after falling short of profit expectations for the fourth quarter.
The Canadian manufacturer notched $0.91 in earnings per share for the quarter, below the $1.08 consensus estimate. On a GAAP basis, earnings per share fell to $0.33 from $1.54 in the year prior. Meanwhile, revenue narrowly exceeded expectations for the fourth quarter.
“2022 was another difficult year for the auto industry as inflation climbed to levels not experienced for decades, geopolitical issues contributed to unprecedented European energy prices and OEM production schedules remained volatile,” CEO Swamy Kotagiri commented. “Nevertheless, we once again generated above-market sales growth, and booked a record amount of business. In 2023, we are highly focused on improving underperforming operations, limiting discretionary costs and securing further inflation recoveries from our customers.”
Moving forward, the company expects sales to “continue to outgrow global light vehicle production through the outlook period.” A forecast of $39.6B to $41.2B in total sales for the full year implies upside to the $39.93B consensus. Sales are expected to hit a range of $44.7B to $47.2B by 2025, essentially in-line with the $46.07B consensus.
However, Q1 earnings per share are expected to decline from Q4 as the company continues to encounter inflationary headwinds. Earnings are expected to improve sequentially following Q1.
Shares of Magna International ( MGA ) slid 11.77% shortly after the market open on Friday.
Read more on long-term earnings expectations for the company .
For further details see:
Magna International stock sinks over 10% on earnings miss