Canada's Magna posts higher profit, raises forecast

By Times Of India on 13 Aug 2017 | read

* Demand increases in Europe and Asia

* Fiscal-year sales forecast raised for 2nd time in 3 months (Adds comments from call)

Aug 11 (Reuters) - Magna International Inc reported a higher quarterly profit on increased demand in Europe and Asia, and the Canadian auto parts maker raised its full-year sales forecast for the second time in three months.

Chief Executive Officer Don Walker told analysts on Friday that Magna would still focus on electrified and self-driving vehicles but was not planning to shed any key units because of this, as fellow auto supplier Delphi Automotive Plc had done.

In May, Delphi said it would spin off operations tied to internal combustion engines and concentrate on technology for electrically powered and self-driving vehicles.

"At this time we think we have the right product capabilities," Walker said.

The Aurora, Ontario-based company still "has room to buy back more stock" after spending $484 million during the quarter in share repurchases and dividends, he added.

Magna's second-quarter sales rose nearly 10 percent to $681 million in Asia and climbed about 3 percent to $3.63 billion in Europe.

Sales in North America, the company's biggest market, increased marginally to $5.37 billion because Magna introduced new programs, even as vehicle production declined.

Walker said he still expected a fairly strong second half of the year for North America, although auto sales have been slowing there.

Still, Magna shares were down more than 2 percent in Toronto trading, while the benchmark Canadian stock index fell 0.3 percent.

Magna, which counts General Motors Co, Volkswagen AG , BMW AG and Ford Motor Co among its biggest customers, now expects 2017 sales at between $37.7 billion and $39.4 billion.

The company raised its sales forecast in May to a range of $36.6 billion to $38.3 billion.

Net income attributable to Magna rose marginally to $561 million, or $1.48 per share, in the quarter.

Excluding special items, earnings of $1.49 per share were 2 cents higher than the analysts' average estimate, according to Thomson Reuters I/B/E/S.

Sales rose 2.5 percent to $9.68 billion, ahead of analysts' expectations of $9.47 billion.

Magna raised its full-year free cash flow estimate to a range of $1.2 billion to $1.4 billion. It had previously forecast $1.1 billion to $1.3 billion. (Reporting by John Benny in Bengaluru and Allison Lampert in Montreal; Editing by Maju Samuel and Lisa Von Ahn)