Magna Announces Second Quarter Results

Sales of $10.1 billion decreased 1%, compared to global light vehicle production down 6%Excluding foreign currency translation and divestitures net of acquisitions, sales up 5% with each segment outpacing global light vehicle productionCash provided from operating activities of $920 millionReturned $519 million to shareholders through share repurchases and dividendsOutlook largely unchangedAURORA, Ontario, Aug. 08, 2019 (GLOBE NEWSWIRE) — Magna International Inc. (TSX: MG; NYSE: MGA) today reported financial results for the second quarter ended June 30, 2019. Please click HERE for full second quarter Financial Statements and MD&A.

THREE MONTHS ENDED JUNE 30, 2019Overall, our results came in slightly ahead of our expectations in the second quarter of 2019, driven by our Body Exteriors & Structures, Power & Vision and Complete Vehicles segments.  Our Seating segment was below our expectations mainly due to continued launch costs and inefficiencies at a new facility.On a consolidated basis, we posted sales of $10.13 billion for the second quarter of 2019, a decrease of 1% from the second quarter of 2018, which compares favourably to global light vehicle production that decreased 6%.  Excluding the impact of foreign currency translation and divestitures net of acquisitions, sales increased 5%, and by segment: Complete Vehicles, Seating and Power & Vision increased 49%, 3% and 1%, respectively, while Body Exteriors & Structures decreased 4%.Adjusted EBIT decreased 16% to $677 million in the second quarter of 2019 resulting in an adjusted EBIT as a percentage of sales of 6.7% in the second quarter of 2019 compared to 7.8% in the second quarter of 2018.  This is mainly due to lower margins in our:Power & Vision segment, largely driven by higher engineering and other costs in our ADAS business, and lower equity income;Seating segment primarily as a result of higher launch costs and inefficiencies at a new facility, lower equity income, and higher commodity costs; andBody Exteriors & Structures segment primarily as a result of reduced earnings due to lower sales.  Income from operations before income taxes was $595 million for the second quarter of 2019 compared to $819 million in the second quarter of 2018.  Included in income from operations before income taxes in the second quarter of 2019 were Other expense, net items totaling $68 million comprised of net unrealized losses on the revaluation of our investments and restructuring costs partially offset by an adjustment to the gain on the sale of our Fluid Pressure & Controls business.  Income from operations before income taxes in the second quarter of 2018 included Other income, net items totaling $39 million.  Excluding Other expense (income), net from both periods, income from operations before income taxes decreased $117 million in the second quarter of 2019 compared to the second quarter of 2018.Net income attributable to Magna International Inc. was $452 million for the second quarter of 2019 compared to $626 million in the second quarter of 2018.  Included in net income attributable to Magna International Inc. in the second quarter of 2019 were Other expense, net items totaling $57 million after tax.  Net income attributable to Magna International Inc. in the second quarter of 2018 included Other income, net items totaling $36 million after tax.  Excluding Other expense (income), net from both periods, net income attributable to Magna International Inc. decreased $81 million in the second quarter of 2019 compared to the second quarter of 2018.Diluted earnings per share decreased to $1.42 in the second quarter of 2019, compared to $1.77 in the comparable period.  Adjusted diluted earnings per share decreased 5% to $1.59 compared to $1.67 for the second quarter of 2018.In the second quarter of 2019, we generated cash from operations of $920 million.  Investment activities for the second quarter of 2019 were $587 million, including $328 million in fixed asset additions, $152 million in acquisitions, and a $107 million increase in investments, other assets and intangible assets.A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/58bfcd6f-4356-4ce7-8e9c-8550b448769dSIX MONTHS ENDED JUNE 30, 2019We posted sales of $20.72 billion for the six months ended June 30, 2019, a decrease of 2% from the six months ended June 30, 2018, which compares favourably with global light vehicle production which decreased 5% in the first six months of 2019 compared to the first six months of 2018. Excluding the impact of foreign currency translation and divestitures net of acquisitions, sales increased 4% and by segment: Complete Vehicles increased 36%, Seating increased 3%, Power & Vision was unchanged and Body Exteriors & Structures decreased 4%; in each case compared to the six months ended June 30, 2018. During the six months ended June 30, 2019, income from operations before income taxes was $1.96 billion, net income attributable to Magna International Inc. was $1.56 billion and diluted earnings per share was $4.83, increases of $293 million, $272 million and $1.23, respectively, each compared to the first six months of 2018.During the six months ended June 30, 2019, Adjusted EBIT decreased 17% to $1.40 billion, and Adjusted diluted earnings per share decreased 8% to $3.22, each compared to the six months ended June 30, 2018.During the six months ended June 30, 2019, we generated cash from operations before changes in operating assets and liabilities of $1.81 billion, and invested $294 million in operating assets and liabilities. Total investment activities for the first six months of 2019 were $920 million, including $579 million in fixed asset additions, $152 million in acquisitions, and $189 million in investments, other assets and intangible assets.RETURN OF CAPITAL TO SHAREHOLDERSDuring the three and six months ended June 30, 2019, we paid dividends of $110 million and $229 million, respectively.  In addition, we repurchased 8.6 million shares for $409 million and 14.2 million shares for $693 million, respectively, for the three and six months ended June 30, 2019.Our Board of Directors declared a quarterly dividend of $0.365 with respect to our outstanding Common Shares for the quarter ended June 30, 2019. This dividend is payable on September 6, 2019 to shareholders of record on August 23, 2019.
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