Magna’s Q2 earnings rise despite strong U.S. dollar
(Reuters) — Canadian auto supplier Magna International Inc. reported higher profits in the second quarter as increased vehicle production in North America offset the impact of a strong U.S. dollar.
Magna said today it posted earnings from continuing operations of $538 million during the second quarter compared with $519 million during the same period last year. Revenue declined 9 percent to $8.1 billion.
Auto sales in the United States and Canada were robust in the April-June period as cheaper gasoline and low interest rates drove the shift toward SUVs and pickup trucks.
However, the dollar surged about 20 percent against a basket of major currencies in the past 12 months, making sales denominated in other currencies less valuable in dollar terms.
On an adjusted basis, Magna earned $1.19 per share for the second quarter, above analysts’ average estimate of $1.18, according to Thomson Reuters.
The company said it expected 2015 operating margin to be about 8 percent, higher than the high-7 percent range it forecast in May.
Magna agreed to sell much of its vehicle interiors business, typically a lower-margin segment, to Spain’s Grupo Antolin in April for about $525 million.
Magna had said in July it would buy privately owned German car parts maker Getrag for 1.75 billion euros ($1.91 billion), to expand its automotive transmission systems business.