* Sales rose 9 percent to $8.36 billion
* 2013 sales outlook raised to between $32.6 bln and $34 bln
* North American production sales up 3 pct; 5 pct in Europe
* Shares rise as much as 5.1 pct
(Recasts, adds details on sales and share buy-back, adds
analyst comment and market reaction)
By Solarina Ho
TORONTO, May 10 Magna International Inc
shares hit a record high on Friday as the Canadian auto
parts maker hiked its full-year sales forecasts after posting a
better-than-expected profit and a 9 percent rise in revenue in
the first quarter.
Aurora, Ontario-based Magna credited rebounding North
American auto demand and increased revenue from Europe, where
its sales rose even though the industry overall has been hurt by
Magna's fortunes are closely linked to the health of the
U.S. vehicle market and Detroit's Big Three - Ford Motor Co
, General Motors Co and Fiat SpA's Chrysler
The automakers have seen a steady recovery since the
industry bottomed in 2008 and 2009 with bankruptcies by GM and
Magna saw a 3 percent rise in its North American production
sales, the company's name for its core business of manufacturing
vehicle parts. Production sales exclude Magna's smaller
vehicle-assembly and tooling operations.
In Europe, Magna's production sales gained 5 percent even as
the broader industry struggled. The auto parts maker has been
pushing to turn around inefficient operations in Europe, where
recovery has lagged North America.
"This is a very strong performance given the weakness in the
European auto industry," analyst David Tyerman wrote in a note
to clients, adding that Magna's exposure to stronger players
like Mercedes, BMW and Volkswagen AG
Carmakers have said that the European auto industry has yet
to turnaround and that some stabilization might be seen toward
the end of the year, or early 2014.
OUTLOOK SHINES ON NORTH AMERICA
Magna, which makes parts ranging from mirrors and auto
bodies to electronics and powertrain systems, said total sales
for 2013 were expected to come in between $32.6 billion and $34
billion, above its previous forecast of C$32 billion to C$33.4
It expected total production sales for the year to be
between $27.2 billion and $28.2 billion, up from its previous
forecast range of $27 billion and $28 billion. The higher
forecast was due entirely to better expectations from North
America. The production sales forecast for Europe was revised
The results and outlook sent shares to record levels, rising
3.8 percent to C$65.59 in Toronto and 3.5 percent to $64.89 in
New York at mid-afternoon. The shares rose as much as 5.1
percent in Friday trade.
SHARE BUYBACK UNDERWAY
During the quarter, Magna repurchased 1.6 million common
shares for $88 million as part of its 12 million share
repurchase program which expires in November.
In its annual general meeting with shareholders, Magna
indicated its intent to repurchase all the remaining shares it
was allowed to under the buyback program, which represents some
4.3 percent of outstanding stock.
Net earnings climbed to $369 million, or $1.57 per share, in
the quarter ended March 31 from $343 million, or $1.46 per
share, a year earlier.
Sales hit a record, rising 9 percent to $8.36 billion,
Analysts had expected a profit of $1.43 a share on revenue
of $8.09 billion, according to Thomson Reuters I/B/E/S.
Magna, which also manufactures complete vehicles on a
contract basis, saw sales in that segment rise 33 percent to
(With additional reporting by Ankur Banerjee; Editing by
Jeffrey Hodgson and Chris Reese)