Skip to main content
Sister Publication Links
  • Automotive News
  • Automobilwoche
  • Automotive News Canada
  • Automotive News China
Subscribe
  • Subscribe
  • Newsletters
  • Login
  • HOME
    • Latest news
    • Automakers
    • Suppliers
    • New Product
    • Environment/Emissions
    • Sales By Market
    • On The Move
    • Auto Shows
    • Munich Auto Show
    • Geneva Auto Show
    • Paris Auto Show
    • Beijing Auto Show
    • Shanghai Auto Show
  • Features
    • Long Read
    • Interview of the Month
    • Focus on Electrification
    • Focus on Technology
    • Segment Analysis
    • Cars & Concepts
    • Supplier Spotlight
    • Europe By The Numbers
  • Opinion
    • Blogs
    • Commentary
    • Guest columnists
  • Photos
    • Photo Galleries
    • Geneva Photo Gallery
    • Beijing Photo Gallery
    • Frankfurt Photo Gallery
    • Paris Photo Gallery
    • Shanghai Photo Gallery
  • Podcasts
  • Car Cutaways
  • EVENTS
    • ANE Congress
    • ANE Rising Stars
    • ANE Eurostars
    • Meet the 2021 winners
    • Browse photos from the 2021 awards ceremony
  • More
    • Publishing Partners
    • Social Media
    • Contact Us
    • Media Kit
    • About Us
    • Capgemini: Securing the industry's future through a radical rethink
    • Capgemini: Succeeding with the automated driving journey through AI
    • HEXAGON: Plugging into data is the only way to make winning EVs
    • TUV Rheinland: Battery testing center for large battery packs and more
    • TUV Rheinland: Ideas, services and certifications for smart mobility
    • TUV Rheinland: Testing of automated and autonomous vehicles on test tracks
    • Toyota Europe
    • UFI Filters
    • Facebook
    • Instagram
    • LinkedIn
    • Twitter
MENU
Breadcrumb
  1. Home
  2. Suppliers
April 29, 2022 11:45 AM

Magna Q1 earnings: Net income fell 41% amid microchip, inflation, war disruption

Magna says net income plunged to $364 million in the quarter ended March 31, down from $615 million in the same period a year earlier.

John Irwin
  • Tweet
  • Share
  • Share
  • Email
  • More
    Print
    New_Magna_Sign.jpg
    GREG LAYSON

    Magna International Inc.'s first-quarter net income fell 41 percent from a year earlier as the microchip shortage and the impact of the war in Ukraine and inflation weighed down the Canadian supplier giant's results.

    Magna reported Friday that net income fell to $364 million in the quarter ended March 31, compared with $615 million in the same period a year earlier.

    Quarterly revenue fell 5.3 percent to $9.64 billion, down from $10.18 billion in the year-earlier period, with a significant decrease in European volumes offsetting sales gains in North America and Asia.

    Magna CEO Swamy Kotagiri said in a statement that the company's results came in "ahead of our expectations," but he cautioned that geopolitical uncertainty, inflation and COVID-19 lockdowns in China will result in lower global vehicle production than previously thought.

    "While these factors negatively impact our outlook, we remain committed to managing through short-term industry adversity and investing for our future," he said.

    Lower outlook

    Magna lowered its sales forecast for this year because of reduced global production. It now expects annual sales of between $37.3 billion and $38.9 billion, compared with its previous estimate of between $38.8 billion and $40.4 billion.

    It expects about 14.7 million vehicles to be built in North America this year, down from a previous forecast of 15.2 million. It lowered its annual European production forecast to 16.4 million vehicles, from 18.5 million previously.

    It assumes about 900,000 units of the Europe reduction will come from Russia amid the country's invasion of Ukraine and sanctions placed on it by the U.S., Canada, Western European nations and others.

    Russia business

    Kotagiri said Magna does not foresee global automakers producing any vehicles in Russia this year.

    "It's a pretty complex matter with so many elements, in terms of government requirements and limitations and how we honor sanctions that are in place," Kotagiri said on a call with analysts. "Most importantly, we're looking at what the customers are guiding, and how they're going to look at this going forward, while keeping in mind how to safeguard employees in Russia."

    Magna has six factories in Russia employing about 2,000 people providing parts to automakers including Hyundai and Volkswagen. The supplier's Russian business generated $371 million in revenue last year, or about 1 percent of its total 2021 sales.

    Inflation, microchips

    Magna's European business took the biggest hit in the first quarter, with revenue falling to $3.7 billion from $4.7 billion a year earlier. North American sales rose to $4.9 billion from $4.6 billion, while Asian sales increased to $1.04 billion from $924 million a year ago.

    As the supplier responds to geopolitical risk in Europe, it continues to be impacted by the global microchip shortage, rising commodity costs and inflation.

    Kotagiri said Magna expects the semiconductor shortage to continue through the year, with supply improvements coming in the second half.

    But rising material and energy costs are holding down the company's results. Magna said higher net input costs are expected to impact its margin by about $290 million this year.

    Sales by segment

    Magna reported $4.08 billion in first-quarter sales from its body exteriors and structures unit, up 1.3 percent from a year earlier. It attributed the gain to the launch of new parts programs for models, including the Jeep Grand Cherokee, Ford Maverick and Ford Bronco, which offset lower vehicle production elsewhere.

    Revenue from its power and vision unit fell 3.5 percent to $3.05 billion, while seating systems revenue jumped 5.6 percent to $1.38 billion.

    Magna's European-based complete vehicle assembly business took a big hit in the first quarter, with revenue plunging 31 percent to $1.28 billion in the first quarter. It produced about 24,600 vehicles for automakers, compared with about 40,000 a year earlier.

    Magna ranks No. 4 on the Automotive News list of the top 100 global suppliers, with $32.6 billion in worldwide parts sales to automakers in 2020.

    RECOMMENDED FOR YOU
    Valeo says next-gen lidar can enable Level 4
    Recommended for You
    VALEO-MAIN_i.jpg
    Valeo says next-gen lidar can enable Level 4
    Northvolt Sweden
    Europe's first homegrown battery plant from Northvolt begins shipments
    REE Automotive
    REE Automotive to build commercial EV plant in UK's Coventry
    Sign up for free newsletters
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please verify captcha.

    Please select at least one newsletter to subscribe.

    You can unsubscribe at any time through links in these emails. For more information, see our Privacy Policy.

    Get Free Newsletters

    Sign up and get the best of Automotive News Europe delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    You can unsubscribe at any time through links in these emails. For more information, see our Privacy Policy.

    SUBSCRIBE TODAY

    Get 24/7 access to in-depth, authoritative coverage of the auto industry from a global team of reporters and editors covering the news that’s vital to your business.

    SUBSCRIBE NOW
    Connect with Us
    • Twitter
    • Facebook
    • LinkedIn
    • Instagram

    Founded in 1996, Automotive News Europe is the preferred information source for decision-makers and opinion leaders operating in Europe.

    Contact Us

    1155 Gratiot Avenue
    Detroit MI  48207-2997
    Tel: +1 877-812-1584

    Email Us

    ISSN 2643-6590 (print)
    ISSN 2643-6604 (online)

     

    Resources
    • About us
    • Contact Us
    • Advertise with us
    • Advertise with Us
    • Ad Choices Ad Choices
    • Sitemap
    Awards
    • Rising Stars
    • Eurostars
    • Leading Women
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Automotive News Europe
    Copyright © 1996-2022. Crain Communications, Inc. All Rights Reserved.
    • HOME
      • Latest news
      • Automakers
      • Suppliers
      • New Product
      • Environment/Emissions
      • Sales By Market
      • On The Move
      • Auto Shows
        • Munich Auto Show
        • Geneva Auto Show
        • Paris Auto Show
        • Beijing Auto Show
        • Shanghai Auto Show
    • Features
      • Long Read
      • Interview of the Month
      • Focus on Electrification
      • Focus on Technology
      • Segment Analysis
      • Cars & Concepts
      • Supplier Spotlight
      • Europe By The Numbers
    • Opinion
      • Blogs
      • Commentary
      • Guest columnists
    • Photos
      • Photo Galleries
      • Geneva Photo Gallery
      • Beijing Photo Gallery
      • Frankfurt Photo Gallery
      • Paris Photo Gallery
      • Shanghai Photo Gallery
    • Podcasts
    • Car Cutaways
    • EVENTS
      • ANE Congress
      • ANE Rising Stars
        • Meet the 2021 winners
      • ANE Eurostars
        • Browse photos from the 2021 awards ceremony
    • More
      • Publishing Partners
        • Capgemini: Securing the industry's future through a radical rethink
        • Capgemini: Succeeding with the automated driving journey through AI
        • HEXAGON: Plugging into data is the only way to make winning EVs
        • TUV Rheinland: Battery testing center for large battery packs and more
        • TUV Rheinland: Ideas, services and certifications for smart mobility
        • TUV Rheinland: Testing of automated and autonomous vehicles on test tracks
        • Toyota Europe
        • UFI Filters
      • Social Media
        • Facebook
        • Instagram
        • LinkedIn
        • Twitter
      • Contact Us
      • Media Kit
      • About Us