Parts maker and contract vehicle assembler Magna International has written its third quarter results in red ink despite only a modest slip in sales.
Operating loss was US$112m, net loss was $215m and loss per share was $1.93, decreases of $379m, $370m and $3.31, respectively, compared to the third quarter of 2007.
Sales fell 9% to $5.5bn as a result of decreases in North American vehicle production and complete vehicle assembly sales, though these were partly offset in part by increases in parts production for vehicles assembled elsewhere, and tooling and engineering sales.
North American average dollar content per vehicle remained essentially unchanged during the quarter while the European figure rose 10%. North American and European vehicle production declined 18% and 8%, respectively.
Complete vehicle assembly sales decreased 20% to $687m and volumes declined 40% to 25,231 units, reflecting Chrysler’s shift of minivan output back to North America with the ’08 model change. Magna previously built most export market versions in Graz, Austria.
Nine-month sales dipped 2% to $18.9bn. Operating income was $493m, net income was $219m and earnings per share $1.92, decreases of $456m, $416m and $3.77, respectively, compared to the same period of 2007.
CFO Vincent Galifi said: “During the third quarter, the auto industry downturn worsened in North America and spread to western Europe. These factors took their toll on our third quarter financial results, and conditions are not expected to improve meaningfully in the short term.
“We are reviewing all uses of cash with an eye to maintaining our strong financial position in light of the turmoil currently facing many automotive participants.”
Magna said its had “significantly reduced” expectations for 2008 light vehicle production volumes in North America and is now predicting 12.8m units there and about 14.9m units in Europe.
Full year consolidated sales are seen between $23.2bn and $24.3bn, average dollar content per vehicle is expected to be between $835 and $860 in North America and between $475 and $495 in Europe while complete vehicle assembly sales are forecast at $3.25bn-$3.45bn.