Magna shares plunge after disappointing Q4 results: ‘Another difficult year’
Global News
Supply disruptions that were expected to have cleared up did not, leading to continued volatility in auto production that made for significant inefficiencies in Magna's operations.
Shares of Magna International Inc. were down almost 15 per cent in late-morning trading Friday as the company reported financial results that came in below expectations.
“2022 was another difficult year for the automotive industry and for Magna,” said company chief executive Swamy Kotagiri on an earnings call with analysts.
Supply disruptions that were expected to have cleared up last year did not, leading to continued volatility in auto production that made for significant inefficiencies in Magna’s operations, he said.
The combination of last-minute production stops at its automaker customers, operating underperformance at some facilities, and higher warranty expenses contributed to a squeeze in fourth quarter margins, said Kotagiri.
“Unfortunately, we ended a difficult year with disappointing Q4 results relative to our expectations entering the quarter.”
The auto parts company, which keeps its books in U.S. dollars, says it earned US$95 million or 33 cents per share in the quarter ended Dec. 31, down from US$464 million or US$1.54 per diluted share in the last three months of 2021.
Sales totalled US$9.57 billion, up from US$9.11 billion a year earlier.
On an adjusted basis, Magna said it earned 91 cents per diluted share in the fourth quarter of 2022, down from an adjusted profit of US$1.30 per diluted share in the same quarter a year earlier.
The move by the United States Postal Service comes after some 55,000 Canada Post workers walked off the job more than two weeks ago.
The Canadian economy underperformed the Bank of Canada's call for 1.5 per cent annualized growth in the third quarter, and per-capita GDP fell for a sixth consecutive quarter.