Magna International has reported a lower fourth-quarter profit on Monday as earnings were squeezed by non-cash charges.

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Magna posted sales of $3.6 billion for the three months ended December 31, 2002, an increase of 25% over the same period a year earlier. However, the company earned net income for the three months ended December 31, 2002 of $110 million, compared to $120 million the previous year. Excluding non-cash impairment charges of $34 million, Magna said that net income from operations would have been $144 million, an increase of 20% over the previous year.

The company said that it earned net income in calendar year 2002 of $550 million, an increase of 6% over the previous year. Excluding non-cash charges, net income would have been $584 million, a 12% annual gain.

The charges included a $36 million writedown on goodwill and assets at its Intier Automotive Inc. and an $18 million non-cash writedown of horse racing licenses and fixed assets at subsidiary Magna Entertainment Corp.

Magna said its sales for the twelve months ended December 31, 2002 were $13.0 billion, an increase of 18% over the twelve months ended December 31, 2001. During the year North American light vehicle production increased by 6% and European light vehicle production declined approximately 1%. The higher sales level in 2002 reflects increases over 2001 of 30% in European content per vehicle, 7% in North American content per vehicle, 20% in tooling and other automotive sales and the increased North American light vehicle production.

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Magna was upbeat in its 2003 outlook assessment. For the first quarter of 2003, the company revised upwards its expectations for North American light vehicle production volumes, from 4.0 million to 4.2 million units, reflecting strong OEM production schedules. Based on this revision, Magna said it now expects automotive sales for the first quarter of 2003 to be between $3.2 billion and $3.4 billion.

For the full year 2003, the company continues to expect light vehicle production to be approximately 16.0 million units and 16.2 million units, for North America and Europe, respectively. Magna continues to expect full year 2003 automotive sales to be in the range of $13.3 billion and $14.1 billion.