Press Release - Magna Reports Record Third Quarter Results
- Magna annonce des résultats records pour le troisième trimestre
- Magna meldet Rekordergebnisse für das dritte Quartal
Please click HERE for a PDF version of the release.
- Record third quarter sales, up 9% year over year to
$9.6 billion - Record third quarter diluted earnings per share of
$1.62 , increased 17% - Record third quarter Adjusted diluted earnings per share of
$1.56 , up 12% - Returned
$629 million to shareholders through share repurchases and dividends - Reduced top end of outlook ranges for Total Sales, Adjusted Net Income attributable to Magna and revised outlook for Adjusted EBIT margin
THREE MONTHS ENDED |
NINE MONTHS ENDED |
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2018 |
2017(2) |
2018 |
2017(2) |
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Reported |
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Sales | $ | 9,618 | $ | 8,864 | $ | 30,690 | $ | 26,904 | ||||||||
Income from operations before income taxes |
$ | 674 | $ | 683 | $ | 2,344 | $ | 2,220 | ||||||||
Net income attributable to |
$ | 554 | $ | 512 | $ | 1,840 | $ | 1,637 | ||||||||
Diluted earnings per share | $ | 1.62 | $ | 1.38 | $ | 5.22 | $ | 4.33 | ||||||||
Non-GAAP Financial Measures(1) |
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Adjusted EBIT | $ | 699 | $ | 705 | $ | 2,377 | $ | 2,281 | ||||||||
Adjusted diluted earnings per share | $ | 1.56 | $ | 1.39 | $ | 5.08 | $ | 4.36 | ||||||||
All results are reported in millions of (1) Adjusted EBIT, Adjusted diluted earnings per share and Adjusted EBIT as a percentage of sales are Non-GAAP financial measures that have no standardized meaning under |
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(2) 2017 amounts included in this Press Release have been adjusted for our adoption of the new revenue standard (Accounting Standards Codification 606) and recast for our new reportable segments. |
THREE MONTHS ENDED
We set third quarter records for sales, diluted earnings per share and Adjusted diluted earnings per share, and returned
On a consolidated basis, we posted sales of
Adjusted EBIT of
- an increase in the proportion of sales generated in our Complete Vehicles segment relative to total sales, which have a significantly lower margin than our consolidated average;
- lower margins in the third quarter of 2018 in our Seating Systems segment, mainly associated with pre-operating costs incurred at new facilities and favourable customer pricing resolutions in the third quarter of 2017; and
- lower margins in our Power & Vision segment, largely reflecting increased spending for electrification and autonomy.
Income from operations before income taxes of
Net income attributable to
Diluted earnings per share increased 17% to
In the third quarter of 2018, we generated cash from operations before changes in operating assets and liabilities of
NINE MONTHS ENDED
We posted sales of
During the nine months ended
During the nine months ended
During the nine months ended
RETURN OF CAPITAL TO SHAREHOLDERS
During the three and nine months ended
Our Board of Directors declared a quarterly dividend of
OTHER MATTERS
Subject to the approval by the
A photo accompanying this announcement is available at http://www.globenewswire.com/NewsRoom/AttachmentNg/6dd59a22-822f-444c-b864-78e2f6a7068f
SEGMENT SUMMARY(2)
($Millions unless otherwise noted) | For the three months ended |
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Sales | Adjusted EBIT | |||||||||||||||
2018 | 2017 | Change | 2018 | 2017 | Change | |||||||||||
Body Exteriors & Structures | $ | 4,180 | $ | 4,004 | $ | 176 | $ | 322 | $ | 306 | $ | 16 | ||||
Power & Vision | 2,947 | 2,830 | 117 | 258 | 267 | (9 | ) | |||||||||
Seating Systems | 1,219 | 1,217 | 2 | 69 | 95 | (26 | ) | |||||||||
Complete Vehicles | 1,391 | 938 | 453 | 24 | 17 | 7 | ||||||||||
Corporate and Other | (119 | ) | (125 | ) | 6 | 26 | 20 | 6 | ||||||||
Total Reportable Segments | $ | 9,618 | $ | 8,864 | $ | 754 | $ | 699 | $ | 705 | $ | (6 | ) |
For the three months ended |
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Adjusted EBIT as a percentage of sales |
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2018 | 2017 | Change | |||||||||||||||||
Body Exteriors & Structures | 7.7 | % | 7.6 | % | 0.1 | % | |||||||||||||
Power & Vision | 8.8 | % | 9.4 | % | (0.6 | )% | |||||||||||||
Seating Systems | 5.7 | % | 7.8 | % | (2.1 | )% | |||||||||||||
Complete Vehicles | 1.7 | % | 1.8 | % | (0.1 | )% | |||||||||||||
Consolidated Average | 7.3 | % | 8.0 | % | (0.7 | )% | |||||||||||||
($Millions unless otherwise noted) | For the nine months ended |
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Sales | Adjusted EBIT | ||||||||||||||||||
2018 | 2017 | Change | 2018 | 2017 | Change | ||||||||||||||
Body Exteriors & Structures | $ | 13,350 | $ | 12,280 | $ | 1,070 | $ | 1,047 | $ | 992 | $ | 55 | |||||||
Power & Vision | 9,334 | 8,685 | 649 | 915 | 861 | 54 | |||||||||||||
Seating Systems | 4,113 | 3,919 | 194 | 315 | 328 | (13 | ) | ||||||||||||
Complete Vehicles | 4,331 | 2,334 | 1,997 | 44 | 38 | 6 | |||||||||||||
Corporate and Other | (438 | ) | (314 | ) | (124 | ) | 56 | 62 | (6 | ) | |||||||||
Total Reportable Segments | $ | 30,690 | $ | 26,904 | $ | 3,786 | $ | 2,377 | $ | 2,281 | $ | 96 |
For the nine months ended |
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Adjusted EBIT as a percentage of sales |
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2018 | 2017 | Change | ||||||||
Body Exteriors & Structures | 7.8 | % | 8.1 | % | (0.3 | )% | ||||
Power & Vision | 9.8 | % | 9.9 | % | (0.1 | )% | ||||
Seating Systems | 7.7 | % | 8.4 | % | (0.7 | )% | ||||
Complete Vehicles | 1.0 | % | 1.6 | % | (0.6 | )% | ||||
Consolidated Average | 7.7 | % | 8.5 | % | (0.8 | )% | ||||
(2) 2017 amounts included in this Press Release have been adjusted for our adoption of the new revenue standard (Accounting Standards Codification 606) and recast for our new reportable segments. |
For further details on our segment results, please see our Management's Discussion and Analysis of Results of Operations and Financial Position and our Interim Financial Statements.
UPDATED 2018 OUTLOOK
We have updated our 2018 outlook largely to reflect our third quarter 2018 results, as well as fourth quarter 2018 expectations for lower light vehicle production, lower equity earnings in our European transmission joint venture and higher costs in our Body Exteriors & Structures segment. | |||||
Current | Previous | ||||
Light Vehicle Production (Units) |
17.0 million 22.5 million |
17.2 million 22.6 million |
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Segment Sales Body Exteriors & Structures Power & Vision Seating Systems Complete Vehicles |
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Total Sales | |||||
Adjusted EBIT Margin(3) | Approximately 7.7% | 7.7% - 7.9% | |||
Equity Income (included in EBIT) | |||||
Interest Expense, net | Approximately |
Approximately |
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Income Tax Rate(4) | Approximately 22% | 22% - 23% | |||
Adjusted Net Income attributable to Magna(5) | |||||
Capital Spending | Approximately |
Approximately |
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(3) Adjusted EBIT Margin is the ratio of Adjusted EBIT to Total Sales (4) The Income Tax Rate has been calculated using Adjusted EBIT and is based on current tax legislation (5) Adjusted Net Income attributable to Magna is Net Income attributable to Magna after excluding Other expense (income), net after-tax and Reassessment of deferred tax balances |
In this 2018 outlook, we have assumed:
- 2018 light vehicle production volumes (as set out above);
- no material unannounced acquisitions or divestitures; and
- foreign exchange rates for the most common currencies in which we conduct business relative to our
U.S. dollar reporting currency as follows:
º 1 Canadian dollar equalsU.S. dollars 0.772
º 1 euro equalsU.S. dollars 1.184
NON-GAAP FINANCIAL MEASURES RECONCILIATION
Adjusted EBIT | |||||||
The following table reconciles net income to Adjusted EBIT: | |||||||
For the three months ended |
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2018 |
2017 |
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Net Income | $ | 560 | $ | 521 | |||
Add: | |||||||
Interest expense, net | 23 | 20 | |||||
Other expense (income), net | 2 | 2 | |||||
Income taxes | 114 | 162 | |||||
Adjusted EBIT | $ | 699 | $ | 705 | |||
Adjusted EBIT as a percentage of sales ("Adjusted EBIT margin") | |||||||
Adjusted EBIT as a percentage of sales is calculated in the table below: | |||||||
For the three months ended |
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2018 |
2017 |
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Sales | $ | 9,618 | $ | 8,864 | |||
Adjusted EBIT | $ | 699 | $ | 705 | |||
Adjusted EBIT as a percentage of sales | 7.3 | % | 8.0 | % | |||
Adjusted diluted earnings per share | |||||||
The following table reconciles net income attributable to |
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For the three months ended |
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2018 |
2017 |
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Net income attributable to |
$ | 554 | $ | 512 | |||
Add: | |||||||
Other expense (income), net | 2 | 2 | |||||
Reassessment of deferred tax balances | (21 | ) | — | ||||
Adjusted net income attributable to |
$ | 535 | $ | 514 | |||
Diluted weighted average number of Common Shares outstanding during the period (millions): | 343.0 | 370.4 | |||||
Adjusted diluted earnings per share | $ | 1.56 | $ | 1.39 |
NON-GAAP FINANCIAL MEASURES RECONCILIATION
Adjusted EBIT | |||||||
The following table reconciles net income to Adjusted EBIT: | |||||||
For the nine months ended |
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2018 |
2017 |
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Net Income | $ | 1,865 | $ | 1,669 | |||
Add: | |||||||
Interest expense, net | 67 | 50 | |||||
Other expense (income), net | (34 | ) | 11 | ||||
Income taxes | 479 | 551 | |||||
Adjusted EBIT | $ | 2,377 | $ | 2,281 | |||
Adjusted EBIT as a percentage of sales ("Adjusted EBIT margin") | |||||||
Adjusted EBIT as a percentage of sales is calculated in the table below: | |||||||
For the nine months ended |
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2018 |
2017 |
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Sales | $ | 30,690 | $ | 26,904 | |||
Adjusted EBIT | $ | 2,377 | $ | 2,281 | |||
Adjusted EBIT as a percentage of sales | 7.7 | % | 8.5 | % | |||
Adjusted diluted earnings per share | |||||||
The following table reconciles net income attributable to |
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For the nine months ended |
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2018 |
2017 |
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Net income attributable to |
$ | 1,840 | $ | 1,637 | |||
Add: | |||||||
Other expense (income), net | (34 | ) | 11 | ||||
Tax effect on Other expense (income), net | 3 | — | |||||
Reassessment of deferred tax balances | (21 | ) | — | ||||
Adjusted net income attributable to |
$ | 1,788 | $ | 1,648 | |||
Diluted weighted average number of Common Shares outstanding during the period (millions): | 352.3 | 377.7 | |||||
Adjusted diluted earnings per share | $ | 5.08 | $ | 4.36 |
Certain of the forward-looking financial measures above are provided on a Non-GAAP basis. We do not provide a reconciliation of such forward-looking measures to the most directly comparable financial measures calculated and presented in accordance with
This press release together with our Management's Discussion and Analysis of Results of Operations and Financial Position and our Interim Financial Statements are available in the Investor Relations section of our website at www.magna.com/company/investors and filed electronically through the System for Electronic Document Analysis and Retrieval (SEDAR) which can be accessed at www.sedar.com as well as on the
We will hold a conference call for interested analysts and shareholders to discuss our third quarter ended
1-800-682-8914. International callers should use 1-303-223-4366. Please call in at least 10 minutes prior to the call start time. We will also webcast the conference call at www.magna.com. The slide presentation accompanying the conference call will be available on our website Thursday prior to the call.
TAGS
Quarterly earnings, record quarter, financial results, sales growth
INVESTOR CONTACT
louis.tonelli@magna.com │ 905.726.7035
MEDIA CONTACT
tracy.fuerst@magna.com │ 248.631.5396
OUR BUSINESS (6)
We have more than 173,000 entrepreneurial-minded employees dedicated to delivering mobility solutions. We are a mobility technology company and one of the world's largest automotive suppliers with 340 manufacturing operations and 89 product development, engineering and sales centres in 27 countries. Our competitive capabilities include body exteriors and structures, power and vision technologies, seating systems and complete vehicle solutions. Our common shares trade on the
(6) Manufacturing operations, product development, engineering and sales centres and employee figures include certain equity-accounted operations.
FORWARD-LOOKING STATEMENTS
We disclose "forward-looking information" or "forward-looking statements" (collectively, "forward-looking statements") to provide information about management's current expectations and plans. Such forward-looking statements may not be appropriate for other purposes.
Forward-looking statements may include financial and other projections, as well as statements regarding our future plans, objectives or economic performance, or the assumptions underlying any of the foregoing, and other statements that are not recitations of historical fact. We use words such as "may", "would", "could", "should", "will", "likely", "expect", "anticipate", "believe", "intend", "plan", "aim", "forecast", "outlook", "project", "estimate", "target" and similar expressions suggesting future outcomes or events to identify
forward-looking statements.
Forward-looking statements in this press release include, but are not limited to, statements related to:
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Our forward-looking statements are based on information currently available to us, and are based on assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate in the circumstances.
While we believe we have a reasonable basis for making such forward-looking statements, they are not a guarantee of future performance or outcomes. Whether actual results and developments conform to our expectations and predictions is subject to a number of risks, assumptions and uncertainties, many of which are beyond our control, and the effects of which can be difficult to predict, including, without limitation:
Risks Related to the Automotive Industry
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Warranty / Recall Risks
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In evaluating forward-looking statements or forward-looking information, we caution readers not to place undue reliance on any forward-looking statement, and readers should specifically consider the various factors which could cause actual events or results to differ materially from those indicated by such forward-looking statements, including the risks, assumptions and uncertainties above which are discussed in greater detail in this document under the section titled "Industry Trends and Risks" and set out in our Annual Information Form filed with securities commissions in