Auto parts maker Magna misses profit estimates as costs bite


The Magna logo is seen during the Munich auto show, IAA Mobility 2021 in Munich, Germany, September 8, 2021. REUTERS/Wolfgang Rattay

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July 29 (Reuters) – Canadian auto parts maker Magna International Inc (MG.TO) reported quarterly profit below expectations on Friday, hurt by rising commodity and energy prices, compounded by the invasion Russian from Ukraine.

The conflict in Eastern Europe has exacerbated input costs, including those of freight, energy, raw materials and labor for auto companies, which were already reeling from supplies due to COVID lockdowns in China.

Magna, which operates six factories in Russia employing 2,500 people, said its facilities remain virtually idle and production is not expected to resume until 2024.

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The Canada-based Aurora maker reported lower profits due to lower sales at its Russian facilities and recorded non-cash impairment charges of $376 million for the second quarter ended May 30. June, related to its investment in Russia.

The company, which manufactures parts such as body structures, chassis and powertrains for customers including Ford Motor (FN) and Volkswagen (VOWG_p.DE), expects continued cost pressures continue throughout the year.

Magna’s quarterly net sales rose 3.6% to $9.36 billion, helped by higher prices and higher global light vehicle production.

Excluding items, it posted earnings of 83 cents per share, versus analysts’ estimates of 94 cents per share, according to Refinitiv data.

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Reporting by Kannaki Deka in Bangalore; Editing by Shailesh Kuber

Our standards: The Thomson Reuters Trust Principles.

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