Magna earns US$51M in Q3, reversing year-earlier loss despite sales decline

By Kristine Owram, The Canadian Press

TORONTO - Magna International Inc. (TSX: MG-A.TO) reported a small profit in the third quarter, reversing a year-earlier loss despite a 14.5 per cent decline in revenue.

The Canadian auto parts giant, which keeps its books in U.S. dollars, said Thursday it earned US$51 million or 45 cents per share in the third quarter, reversing a year-earlier loss of $215 million or $1.93 per share.

Sales for the company headquartered in based in Aurora, Ont., were $4.7 billion, down from $5.5 billion in the third quarter of 2008 as a result of "significant declines" in vehicle production in both North America and Europe.

"Our ongoing restructuring actions and implementation of a number of cost saving measures all contributed to our improved financial results," the company stated.

Magna said vehicle production in North American fell 20 per cent year-over-year to 2.3 million units, while production in Europe dropped nine per cent to 2.9 million units. However, quarter-over-quarter vehicle production increased 32 per cent in North America.

Meanwhile, Magna's North American average dollar content per vehicle increased eight per cent, while European content was unchanged.

Complete vehicle assembly sales fell 38 per cent to $428 million compared with a year earlier, while complete vehicle assembly volume dropped 42 per cent to 14,700 units.

On Tuesday, General Motors (NYSE: GM) dashed plans to sell 55 per cent of its Opel division to a consortium involving Magna and Russian lender Sberbank. The two sides had reached a tentative agreement in September, but GM backed out after it decided it could restructure Opel on its own for less money than it would have to spend under the Magna deal.

Shares in Magna, which reported after the close of markets Thursday, lost 27 cents to $47.07 on the Toronto Stock Exchange.