Automotive supplier Magna International has revised down its 2022 financial results expectations despite posting sales of US$9.3 billion for the third quarter of 2022, an increase of 17% over the third quarter of 2021.
It said that excluding the impact of foreign currency translation and acquisitions net of divestitures, sales increased 27%.
Operating profit was also up in Q3. Adjusted EBIT increased to US$441 million in the third quarter of 2022 compared to US$229 million in the third quarter of 2021. The increase mainly reflected earnings on higher sales, higher favourable commercial settlements and a US$45 million provision on engineering service contracts with the automotive unit of Evergrande in the third quarter of 2021, partially offset by higher net production input costs and operating inefficiencies at a facility in Europe.
Income from operations before income taxes increased to $400 million for the third quarter of 2022 compared to $27 million in the third quarter of 2021.
Swamy Kotagiri, Magna CEO, said: “In the third quarter, we managed through an operating environment that remains challenged by ongoing production schedule volatility and elevated energy costs in Europe. We continue to take steps to address the short-term industry turbulence as well as operating inefficiencies at certain facilities, while remaining focused on our go-forward strategy and value creation.”
In terms of the 2022 outlook, Magna shaved its sales revenue and profitability forecasts on higher costs and lower sales for the sector as a whole.