Magna International has revised its full-year sales expectations, projecting figures between $42.2 billion and $43.2 billion for 2024. This adjustment comes as third-quarter results fell short of market expectations, coupled with the Canadian auto parts supplier's announcement to expedite share buybacks. The updated revenue outlook is notably less than Magna's previous forecast of $42.5 billion to $44.1 billion, aligning more closely with the consensus of $42.9 billion from Capital IQ.
Adjusted net income is now estimated between $1.45 billion and $1.55 billion, down from an earlier guidance of $1.5 billion to $1.7 billion. Shares of Magna, which are traded on the New York Stock Exchange, rose 7.1% during midday trading following the announcement. The company's assessment highlights "reduced vehicle production" across its main regions, as discussed by Chief Financial Officer Patrick McCann during an earnings call.
The latest forecast indicates a decrease in light vehicle production expectations, projecting 15.4 million units in North America, down from prior estimates of 15.7 million. For Europe and China, Magna anticipates production of 16.9 million and 28.9 million units respectively, compared to earlier forecasts of 17.1 million and 29 million. In the recently concluded September quarter, Magna reported adjusted earnings of $1.28 per share, a decline from $1.46 noted in the same quarter a year prior, and missed the predicted figure of $1.40.
Sales experienced a drop of 4%, totaling $10.28 billion, which was less than the $10.39 billion that analysts had anticipated. CEO Swamy Kotagiri stated, "We continue to mitigate industry headwinds including lower production volumes in each of our core regions." The decline in global light vehicle production was observed at 4%, with North America and China both witnessing a drop of 6%, while Europe experienced a decrease of 2%.
This downturn in sales was partially attributed to divestitures and the conclusion of specific production programs, though it was somewhat offset by price increases, as noted by Magna. Revenue from the body exteriors and structures segment fell to $4.04 billion from $4.35 billion year-over-year, while the power and vision segment saw an increase to $3.84 billion from $3.75 billion.
Sales for seating systems decreased to $1.38 billion from $1.53 billion, and complete vehicles saw a slight decline to $1.16 billion from $1.19 billion. In a bid to bolster shareholder value, the board has approved a one-year program aimed at repurchasing around 28.5 million of its common shares, which constitutes roughly 10% of its public float.
With approval pending from the Toronto Stock Exchange, this buyback initiative is anticipated to commence around November 7. Kotagiri expressed confidence in this strategy, stating, "We expect to restart meaningful share repurchases this quarter. We believe this capital allocation strategy provides the continued flexibility to both support future growth and further return capital to our shareholders.".