Magna International Posts Disappointing Q4 Results; Shares Drop 6.5%

Mobility technology company for automakers Magna International Inc. (NYSE: MGA) has reported weaker-than-expected results for the quarter ended December 31, 2021, due to a decline in overall sales.

Following the results, shares of the company plummeted 6.5% on Friday. Although, the stock pared its losses by about 2.2% to close at $77.34 in the extended trading session.

Revenue & Earnings

Magna International’s quarterly revenues of $9.1 billion denote a year-over-year fall of roughly 14%. The figure also failed to surpass the consensus estimate of $9.31 billion. All the major segments reported a decline, especially the Body Exteriors & Structures segment, and Power & Vision segment, falling 17.6% and 11.8% year-over-year, respectively.

The company reported quarterly earnings of $1.30 per share, down 54.1% from the same quarter last year. Further, the figure failed to beat the consensus estimate of $1.59 per share.

In other operating metrics, the company’s adjusted EBIT witnessed a decline of 53.6% year-over-year to $508 million.

Further, the cash provided from operating activities declined to about $1.3 billion from $2.3 billion in the prior-year period.


The company expects to report sales between $38.8 billion and $40.4 billion in 2022.

CEO’s Comments

The CEO of Magna International, Swamy Kotagiri, said, “Although 2021 presented its share of challenges, we delivered above-market sales growth and generated solid free cash flow, as we worked closely with our customers and suppliers to minimize the impacts on vehicle production.Despite significant input cost headwinds, we expect improved operating results in 2022 as the industry recovers and production schedules normalize. In addition, we remain confident in our ability to capitalize on the opportunities in front of us, especially in the areas of electrification, autonomy and new mobility.”

Stock Rating

Consensus among analysts is a Strong Buy based on 3 Buys and 1 Hold. The average Magna International price target of $94 implies upside potential of 24.2% from current levels. Shares have declined 3.5% over the past year.

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