Magna International Inc. (TSX: MG) Friday posted record sales of US$9.68 billion for the second quarter 2017
SmallCapPower | August 14, 2017: Magna International Inc. (TSX: MG) Friday posted record sales of US$9.68 billion for the second quarter 2017 (up 3% YoY). The year-over-year growth was achieved despite North American and European light vehicle production declining by 3% and 1%, respectively. Vehicle assembly sales increased 14% in the second quarter largely reflecting the start of production of the BMW 5-Series at assembly facility in Graz, Austria, partially offset by the end of production of the MINI Countryman and Paceman in 2016.
During the quarter, adjusted EBIT decreased 2% to US$776 million, compared to US$789 million in the prior year quarter. Asia and Rest of World segments posted higher Adjusted EBIT and Adjusted EBIT percentage of sales, compared to the second quarter of 2016. During the quarter, Magna International generated cash from operations of US$948 million before changes in operating assets and liabilities, and invested US$391 million in operating assets and liabilities. Total investment activities for the second quarter of 2017 were US$563 million, including US$420 million in fixed asset additions and US$143 million in investments, other assets and intangible assets.
As part of the capital return program, Magna International repurchased 8.5 million shares for US$383 million in the quarter. Additionally, the board of directors declared a quarterly dividend of US$0.275 with respect to outstanding Common Shares for the quarter ended June 30, 2017. This dividend is payable on September 15, 2017 to shareholders of record on September 1, 2017.
Post the strong sales in second quarter, Magna International raised its full-year sales outlook for 2017. The Company now expects total sales in the range of US$37.7-39.4 billion, compared with its previous outlook of US$36.6-38.3 billion.
In terms of valuation, Magna International currently trades at TTM price to sales value of 0.58x, price to book value of 2.13x and trailing P/E of 10.59x. Shares of Magna International moved up 1.2% to C$58.60 in early Monday trading.
Disclosure: Neither the author nor any of the principals at Small Cap Power, or their family members, own shares in any of the companies mentioned above.
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