Vehicle component and assembly specialist Magna International has reported net income for the first quarter of 2002 up 3% to $153 million on record sales of $3.1 billion, an increase of 9% over Q1, 2001.
During the quarter, European light vehicle production decreased approximately 5% and North American light vehicle production increased approximately 4% while Magna’s automotive sales increased 10% from the first quarter of 2001.
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The higher sales reflect a 25% increase in European content per vehicle and a 4% increase in North American content per vehicle, partially offset by a 7% decrease in tooling and other sales.
Diluted earnings per share increased by 4% to $1.65 for the first quarter of 2002, compared to adjusted diluted earnings per share of $1.58 for the first quarter of 2001.
During the first quarter of 2002 cash generated from operations before changes in non-cash working capital was $290 million. Total investment activities during the quarter were $136 million, including $123 million in fixed assets additions, $1 million to purchase a subsidiary and $12 million in investments and other assets.
Magna has also declared its regular quarterly dividend with respect to its outstanding Class A Subordinate Voting Shares and Class B Shares for the first quarter of $US0.34 per share.
In a statement, Magna said it expected that North American light vehicle production volumes would remain strong in the second quarter of 2002 based on current manufacturer production schedules.
However, the company remains cautious about North American light vehicle production volumes in the second half of 2002 due to uncertainty about general economic conditions.
In Europe, Magna expects weaker economic conditions to result in a decline in light vehicle production volumes in 2002 compared with 2001.
Magna expects automotive sales for the second quarter of 2002 of between $2.9 billion and $3.1 billion and diluted earnings per share from operations in the range of $1.70 to $1.90.
The company is assuming full year 2002 light vehicle production volumes of approximately 16.0 million units in North America and approximately 16.2 million units in Europe.
Based on the assumed levels of production volumes, the increases in average dollar content per vehicle in North America and Europe and anticipated tooling and other automotive sales, the company expects its automotive sales for the full year 2002 to range from $11.1 billion to $12.0 billion, compared to 2001 automotive sales of $10.5 billion.
Diluted earnings per share from operations for 2002 are expected to be in the range of $5.65 to $6.15.
Full year 2002 spending for fixed assets for its automotive business is forecast in the range of $650 million to $700 million, compared to $486 million in 2001.
