Magna (MGA) Earnings Surpass Estimates in Q2, Decline Y/Y

Magna International Inc. MGA delivered adjusted earnings per share of $1.59 in second-quarter 2019, beating the Zacks Consensus Estimate of $1.57. However, the bottom line was lower than the year-ago quarter’s figure of $1.67.

The company’s revenues declined 1% year over year to $10.1 billion. However, its revenues surpassed the Zacks Consensus Estimate of $10 billion.

Adjusted EBIT declined to $677 million from the year-ago figure of $803 million.

Magna International Inc. Price, Consensus and EPS Surprise

 

Magna International Inc. Price, Consensus and EPS Surprise

Magna International Inc. price-consensus-eps-surprise-chart | Magna International Inc. Quote

Segmental Performances

Revenues at the Body Exteriors & Structures segment declined 6.8% year over year to $4.2 billion in the reported quarter. Adjusted EBIT was down to $413 million from the prior-year quarter’s figure of $388 million.

Revenues at the Power & Vision segment moved down to $2.8 billion from the prior-year quarter figure of $3.2 billion. Adjusted EBIT declined to $201 million from $299 million in second-quarter 2018.

Revenues from the Seating Systems segment rose to $1.45 billion in the quarter under review. Adjusted EBIT declined to $83 million from $117 million recorded in the prior year.

Revenues at the Complete Vehicles segment rose 40.8% year over year to $1.8 billion. Adjusted EBIT grew to $43 million from $1 million in second-quarter 2018.

Financials

Magna had $563 million of cash and cash equivalents as of Jun 30, 2019, compared with $684 million as of Dec 31, 2018. It had long-term debt of $3.1 billion as of Mar 31, 2019, similar to the figure recorded as of Dec 31, 2018.

At the end of second-quarter 2019, the company’s cash flow from operations was $920 million in comparison with $467 million recorded at the end of second-quarter 2018.

Capital Deployment

Magna’s board of directors announced a dividend of 36.5 cents per share for the second quarter of 2019. This dividend will be paid on Sep 6, 2019, to shareholders of record as of Aug 23, 2019.

Zacks Rank & Stocks to Consider

Currently, Magna has a Zacks Rank #4 (Sell).

A few better-ranked stocks in the auto space are Fox Factory Holding Corp FOXF, CarMax, Inc. KMX and Gentex Corporation GNTX, each currently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Fox Factory has an expected long-term growth rate of 16.7%. In the past year, shares of the company have rallied 16.2%.

CarMax has an expected long-term growth rate of 12.6%. In the past year, shares of the company have moved up 13.3%.

Gentex has an expected long-term growth rate of 5%. In the past year, shares of the company have returned 17.3%.

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