* Expects 2013 total sales of $33.3 bln-$34.7 bln
* Sees 2013 total production sales of $27.7 bln-$28.7 bln
* 2nd-quarter earnings per share $1.78 vs est $1.64
* Sales rise 16.1 pct to $8.96 bln vs est $8.56 bln
(Adds CFO interview, conference call details on Europe
turnaround, M&A outlook)
By Solarina Ho
Aug 9 Canadian auto parts maker Magna
International Inc reported a 19 percent rise in its
quarterly profit on Friday and raised its sales outlook for the
year, buoyed by better-than-expected European and North American
The results sent Magna's stock, which have soared some 70
percent so far this year on the Toronto Stock Exchange, to an
all-time high on Friday.
Magna's core business posted a double-digit rise in sales in
Europe, where Magna has been pushing to turn around inefficient
operations amid the region's soft recovery. The company said it
is continuing to take steps to improve its business in Europe.
"It has taken a lot of hard work and there is certainly more
to come, but we are headed in the right direction in Europe,"
Chief Executive Don Walker said, adding that he expects
continued improvement in the coming quarters.
Further restructuring efforts are being pursued, with $94
million out of total estimated restructuring charges of $100
million still to be taken in the second half of the year. Magna
so far has recognized roughly $6 million in those charges.
"Those costs relate to plans and actions that we're going to
take in Europe," Vince Galifi, chief financial officer, said in
an interview, adding that discussions were ongoing with a number
of parties including labor and customers. He declined to give
"It's hard to tell whether that's going to be Q3 or Q4. We
do expect we'll have some announcement before the end of this
year. ... We're pleased with progress we're seeing in Europe."
Magna raised its sales forecast for the year to $33.3
billion-$34.7 billion from $32.6 billion-$34 billion.
The company also raised its sales forecast for its core
business, known as production sales, for the year to between
$27.7 billion and $28.7 billion, from a previous range of $27.2
billion-$28.2 billion. Production sales comprise the business of
manufacturing vehicle parts, excluding vehicle assembly and
Magna's fortunes are tied to the health of automakers,
particularly 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 Chrysler.
Magna has continued to diversify, with business in Europe
and Asia growing at a faster rate, Galifi said. The company is
looking to gain a bigger foothold in Asian markets such as China
over the longer term, he said.
NOT RUSHING INTO DEALS
Magna, which typically spends $300 million to $600 million a
year on acquisitions, is looking at deals that will help it grow
more quickly in priority regions such as emerging markets,
executives told analysts during a conference call. But it will
not rush into any transactions.
"It's been pretty quiet this year. We're still going to have
six months to go," said Galifi.
Executives will meet with the board in September to discuss
product strategy and consider possible divestitures, Walker
For the second quarter, Magna's net income rose to $415
million, or $1.78 per share, from $349 million, or $1.48 per
share, in the same period last year.
Sales rose 16.1 percent to a record $8.96 billion.
Analysts on average had expected a profit of $1.64 per share
on revenue of $8.56 billion, according to Thomson Reuters
North American production sales climbed 10 percent to $4.30
billion, while vehicle production fell 7 percent. In Europe,
production sales rose 14 percent to $2.56 billion while vehicle
production slipped 1 percent. Production sales in the rest of
the world jumped 38 percent to $572 million.
Shares were up 3.8 percent at C$83.21 in Toronto, after
trading as high as C$83.36, and were up 5.1 percent at $80.85 in
New York after hitting $81.01.
(Additional reporting by Vijay Vishwas in Bangalore; Editing by