Mr. Don Walker reports
MAGNA ANNOUNCES FIRST QUARTER RESULTS
Magna International Inc. has provided its financial results for the first quarter ended March
31, 2015.
Three months ended
March 31,
2015 2014
Sales $8,330 $8,961
Adjusted EBIT(1) $642 $605
Income from operations before income taxes $631 $581
Net income attributable to Magna International Inc. $465 $393
Diluted earnings per share $1.12 $0.88
All results are reported in millions of U.S. dollars, except per share figures, which are in U.S. dollars. Adjusted EBIT (earnings before interest and taxes) is the measure of segment profit or loss as reported in the company's attached unaudited interim consolidated financial statement. Adjusted EBIT represents income from operations before income taxes; interest expense, net; and other expense, net.
Three months ended March 31, 2015
The company posted sales of $8.33-billion for the first quarter ended March 31,
2015, a decrease of $631-million or 7 per cent from the first quarter of 2014.
The weakening of certain currencies against the company's U.S. dollar reporting
currency, in particular the euro and Canadian dollar, had a significant
negative impact on the company's reported sales for the first quarter of 2015.
Foreign currency translation reduced the company's sales by approximately $880-million, as compared with the first quarter of 2014. Excluding the
impact of foreign currency translation, the company's sales increased 3 per cent in the
first quarter of 2015, compared with the first quarter of 2014. North
American and European light vehicle production each declined marginally
in the first quarter of 2015, compared with the first quarter of 2014.
Complete vehicle assembly sales decreased 28 per cent to $584-million for the
first quarter of 2015 compared with $813-million for the first quarter of
2014, of which foreign currency translation accounted for $127-million
of the decrease. Complete vehicle assembly volumes decreased 23 per cent to
approximately 27,000 units in the first quarter of 2015 compared with the
first quarter of 2014.
During the first quarter of 2015, income from operations before income
taxes was $631-million, net income attributable to Magna International
Inc. was $465-million and diluted earnings per share were $1.12,
increases of $50-million, $72-million and 24 cents, respectively, each
compared with the first quarter of 2014.
Excluding other expense, after tax and the impact of the Austrian tax
reform, each in the first quarter of 2014, income from operations
before income taxes, net income attributable to Magna International
Inc. and diluted earnings per share for the first quarter of 2015
increased $28-million, $20-million and 12 cents respectively, each
compared with the first quarter of 2014.
During the first quarter ended March 31, 2015, the company generated cash from
operations of $652-million before changes in non-cash operating assets
and liabilities, and invested $358-million in operating assets and
liabilities. Total investment activities for the first quarter of 2015
were $323-million, including $280-million in fixed asset additions, $42-million in investments and other assets, and $1-million to purchase
subsidiaries.
Don Walker, Magna's chief executive officer commented: "We posted
improved earnings and return on funds employed, as well as excellent
cash flow generation. While the strengthened U.S. dollar negatively
impacted our reported sales and earnings, our underlying operations
performed well in the quarter.
"We have been refining our product portfolio to focus on certain key
areas of the vehicle, reflected in our agreements this year to sell
substantially all of our interiors operations, our battery pack
business, as well as our sale last year of certain non-core composites
operations. At the same time, we have been taking steps to expand in
other areas such as metalforming, where the company recently announced a joint
venture in China."
A more detailed discussion of the company's consolidated financial results for the
first quarter ended March 31, 2015, is contained in the management's
discussion and analysis of results of operations and financial position,
and the unaudited interim consolidated financial statements and notes
thereto.
Dividends
Yesterday, the company's board of directors declared a quarterly dividend of 22
cents with respect to the company's outstanding common shares for the quarter ended
March 31, 2015. This dividend is payable on June 12, 2015, to
shareholders of record on May 29, 2015.
Updated 2015 outlook
The company's updated 2015 outlook below excludes full year 2015 financial
information for the interiors operations the company intend to sell, pursuant to
the company's agreement with Grupo Antolin announced on April 16, 2015. This
will be consistent with disclosure of the business as discontinued
operations beginning with the reporting of the company's financial results for
the second quarter ended June 30, 2015.
Light vehicle production (units)
North America 17.4 million
Europe 20.2 million
Production Sales
North America $17.2-billion to $17.8-billion
Europe $6.9-billion to $7.3-billion
Asia $1.7-billion to $1.9-billion
Rest of world $600-million to $700-million
Total production sales $26.4-billion to $27.7-billion
Complete vehicle assembly sales $2.1-billion to $2.4-billion
Total sales $30.8-billion to $32.5-billion
Operating margin(1) High 7-per-cent range
Tax rate(1) Approximately 26 per cent
Capital spending $1.3-billion to $1.5-billion
(1) Excluding other expense, net
In this 2015 outlook, in addition to 2015 light vehicle production, the company has assumed no material acquisitions or divestitures other than the
interiors divestiture noted above. In addition, the company has assumed that
foreign exchange rates for the most common currencies in which the company conducts business relative to the company's U.S. dollar reporting currency will
approximate current rates.
CONSOLIDATED STATEMENTS OF INCOME
(U.S. dollars in millions, except per share figures)
Three months ended March 31,
2015 2014
Sales $8,330 $8,961
Costs and expenses
Cost of goods sold 7,183 7,762
Depreciation and amortization 205 217
Selling, general and administrative 355 425
Interest expense, net 11 2
Equity income (55) (48)
Other expense, net - 22
Income from operations before income taxes 631 581
Income taxes 167 189
Net income 464 392
Net loss attributable to non-controlling interests 1 1
Net income attributable to Magna International Inc. $465 $393
Earnings per common share
Basic $1.14 $0.89
Diluted $1.12 $0.88
Cash dividends paid per common share (restated) $0.22 $0.19
The company seek Safe Harbor.
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