Canadian auto parts supplier Magna International opted to trim down its revenue forecast for 2015, citing as the primary reason for the weaker upcoming results the situation in Europe, where demand has failed to grow as expected.
On the old continent last year sales of cars and SUVs started to rise for the first time after a six-year slump that led to two decade lows, thanks to added incentives and support from both governments and the automakers. The low basis still remained very well below the levels seen before the crisis as numerous countries on the continent still struggled to restart growth. According to a company statement, the parts maker also accepted a two-for-one stock split that would be initialized through a stock dividend. Magna’s quarterly dividend was updated positively to 44 cents per share from 38 cents and after the split the stakeholders will be offered 22 cents per share.
Magna also opted to lower its 2015 prediction for total production sales – meaning the revenue from the core vehicle parts business – to $28.2 billion-$29.5 billion from the previous figure of $29.2 billion-$30.5 billion. The same was done for the forecast regarding production sales in Europe, down from $9 billion-$9.4 billion to just $8.3 billion-$8.7 billion. The total revenue forecast was also negatively affected, slumping from $34.4 billion-$36.1 billion to $33.1 billion-$34.8 billion. During the fourth quarter, ending December 31, 2014, Magna’s net income surged 11 percent to $509 million, or $2.44 per share and sales grew around 2 percent to $9.39 billion.
Via AUtomotive News Europe