Magna International Crushes Earnings Estimates

Seth Jayson, The Motley Fool
Updated

Magna International (NYS: MGA) reported earnings on Feb. 23. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Magna International beat slightly on revenues and crushed expectations on earnings per share.

Compared to the prior-year quarter, revenue increased, and GAAP earnings per share improved significantly.

Gross margins dropped, operating margins expanded, and net margins improved.

Revenue details
Magna International reported revenue of $7.25 billion. The nine analysts polled by S&P Capital IQ expected to see revenue of $7.16 billion on the same basis. GAAP reported sales were 9.9% higher than the prior-year quarter's $6.60 billion.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
Non-GAAP EPS came in at $1.46. The 16 earnings estimates compiled by S&P Capital IQ anticipated $1.01 per share on the same basis. GAAP EPS of $1.32 for Q4 were 48% higher than the prior-year quarter's $0.89 per share.

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Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 11.6%, 10 basis points worse than the prior-year quarter. Operating margin was 3.6%, 20 basis points better than the prior-year quarter. Net margin was 4.3%, 100 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $7.29 billion. On the bottom line, the average EPS estimate is $1.16.

Next year's average estimate for revenue is $28.96 billion. The average EPS estimate is $4.59.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 168 members rating the stock outperform and 20 members rating it underperform. Among 56 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 52 give Magna International a green thumbs-up, and four give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Magna International is outperform, with an average price target of $51.56.

At the time thisarticle was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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