Magna International, which has reported a 14% jump in first-quarter profit and raised its sales forecast on Thursday, also said it was setting its sights on eastern Europe and Asia to lift revenues. According to Reuters, Magna, the world’s seventh biggest car parts supplier, said it planned to take advantage of vehicle production growth in eastern Europe, where eight former communist countries joined the European Union last week.
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The Canadian company reportedly said vehicle production is expected to grow 57% in eastern Europe by 2008, compared with just 4% in western Europe. Much of that growth is being driven by French carmakers and Toyota, Magna executive vice chairman Siegfried Wolf reportedly said at the company’s annual meeting. Magna, which derives much of its business from the [Detroit-based] Big 3 and only 4% of sales from Japanese carmakers, also said it would make a concerted push in Asia to crack that market, Reuters noted. That drive could include joint ventures or the acquisition of a Japanese supplier, reportedly said Wolf, adding the company was also taking a “cautious and opportunistic” approach to China. As well as reporting a higher quarterly profit, the company raised its dividend by 12% as revenues jumped 46%, Reuters said, adding that first-quarter profit was $184 million, or $1.84 a share, compared with $161 million, or $1.37 a share, in the year-earlier period. Magna’s net earnings from continuing operations were $184 million, or $1.84 a share, compared with a profit of $154 million, or $1.57 a share, in the same period last year, the report said, noting that analysts had forecast, on average, profit of $1.74 a share, according to Reuters Research. The Aurora, Ontario, company reportedly said revenues in the quarter rose to $5.1 billion from $3.5 billion, reflecting higher content per vehicle levels in North America and Europe. Magna’s revenue topped analysts’ estimates of $4.67 billion. According to Reuters, the company said the value of Magna parts in vehicles rose 26% in North America and 86% in Europe and also raised its sales forecast for 2004 to between $18.5 billion and $19.4 billion, compared with 2003 sales of $15.3 billion.
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