Magna (MGA) 2020 Q4 Earnings Report

Magna International Inc. (NYSE:MGA) history dates back to 1957 when founder Frank Stronach opened a one-man tool and die shop in Toronto and named it Multimatic. A couple of years later, the company secured the first major contract from General Motors to manufacture metal sun visor brackets.

The company went public in 1969 by merging with Magna Electronics, a defense and aerospace component manufacturer. Magna continued to grow its international presence over the years, besides expanding into new segments and launching innovative products and systems for the automotive industry. Today, it is a leading automotive supplier with annual sales exceeding $32 billion.

Magna on Friday announced strong financial results for the fourth quarter along with solid revenue guidance for 2021. The Canadian auto parts maker reported earnings of $2.45 per share for the three months ended Dec. 31, well above $1.43 per share in the comparable period of 2019. On an adjusted basis, profit increased by more than two-folds to $2.83 per share to beat analysts’ average estimate of $2.02 per share.

Revenue surged 12 percent on a year-over-year basis to $10.6 billion, above the consensus forecast of $10.02 billion. Magna shares jumped 10.36 percent to $83.27 on Friday following better-than-expected results for Q4.

Looking forward, Magna expects to post revenue in the range of $40 billion to $41.6 billion for the current fiscal year, higher than analysts’ average estimate of $38.41 billion.

Commenting on the guidance, CEO Swamy Kotagiri said, “Our outlook reflects a product strategy aligned with sustainability objectives, further growth driven by technologies that support the car of the future, margin expansion and continued strong free cash flow generation.”

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Magna’s stock has performed well in recent months. The stock has jumped about 60 percent during the past 12 months, while it is up nearly 17 percent so far in 2021.