Jaguar production helps Magna to record Q1 net income

Magna International posted record net income of $660 million in the first quarter, up 14 percent from a year ago.

The supplier also reported record quarterly sales of $10.79 billion, up 21 percent year-over-year, due in large part to the company's contract assembly business.

Magna recorded higher demand for its mirrors and electronic components. The supplier's power and vision division posted adjusted earnings of $358 million, up $30 million over the same quarter last year. It was the biggest adjusted earnings increase of all of its four divisions.

While Magna reported sales growth in each of its operating segments, the company's "complete vehicle segment" contributed to approximately 60 percent of the sales increase. Sales in that segment, which sees Magna assemble cars under contract for automaker at Magna Steyr, Austria, rose more than threefold to $1.66 billion.

Jaguar output

Magna has been building the Mercedes G class since 1979. It also produces BMW 5-series models with conventional and plug-in hybrid powertrains. Assembly of the Jaguar E-Pace started in late 2017, and production of the I-Pace was added during the first quarter of 2018.

In March, Automotive News Europe reported that Magna also will build two new sports cars jointly developed by BMW and Toyota. Magna declined to comment.

The company was able to post record numbers despite a 4.4 percent decline in light-vehicle production in North America and essentially unchanged production numbers in Europe when compared with the first quarter of 2017. Light-vehicle production in China was up 1 percent.

The company also said the strengthening of foreign currencies against the U.S. dollar, including the euro, Canadian dollar and Chinese renminbi, helped the supplier make financial gains but that those were partially offset by the impact of changes in production volumes on other programs, particularly in North America and Europe.

"Our operating results are primarily dependent upon the levels of North American and European car and light truck production," Magna said in a statement.

Sales were up in Magna's body and structures ($4.61 billion), seating systems ($1.47 billion) and power and vision ($3.19 billion) divisions. In December, Magna realigned its divisions and created four global product segments. This was the first time the company reported quarterly sales and earnings for each unit.