Magna Posts Strong Results, Driven by Resurgent Vehicle Sales

Magna posted sales of $6.1 billion for the second quarter ended June 30, 2010, an increase of 63% from the second quarter of 2009. This higher sales level was a result of increases in its North American, European and Rest of World production sales, complete vehicle assembly sales and tooling, engineering and other sales.
During the second quarter of 2010, North American and European average dollar content per vehicle increased by 27% and 8%, respectively, each compared to the second quarter of 2009. In addition, North American and European vehicle production increased 75% and 13%, respectively, each compared to the second quarter of 2009.
Complete vehicle assembly sales increased 39% to $590 million for the second quarter of 2010 compared to $423 million for the second quarter of 2009, while complete vehicle assembly volumes increased 59% to approximately 22,400 units.
During the second quarter of 2010, operating income was $373 million, net income was $293 million and diluted earnings per share were $2.59, increases of $610 million, $498 million and $4.42, respectively, each compared to the second quarter of 2009.
During the second quarter ended June 30, 2010, Magna generated cash from operations of $463 million before changes in non cash operating assets and liabilities, and generated $74 million in non cash operating assets and liabilities. Total investment activities for the second quarter of 2010 were $187 million, including $164 million in fixed asset additions and $23 million in investments and other assets.
Magna posted sales of $11.6 billion for the six months ended June 30, 2010, an increase of 59% from the six months ended June 30, 2009. This higher sales level was a result of increases in its North American, European and Rest of World production sales, complete vehicle assembly sales and tooling, engineering and other sales.
During the six months ended June 30, 2010, vehicle production increased 71% to 6 million units in North America and 22% to 6.9 million units in Europe, each compared to the first six months of 2009.
Also during the first six months of 2010, our North American and European average dollar content per vehicle increased 15% and 11% respectively, each compared to the first six months of 2009.
Complete vehicle assembly sales increased 26% to $1 billion for the six months ended June 30, 2010 compared to $824 million for the six months ended June 30, 2009, while complete vehicle assembly volumes increased 55% to approximately 40,400.
During the six months ended June 30, 2010, operating income was $658 million, net income was $516 million and diluted earnings per share were $4.56, increases of $1.1 billion, $921 million and $8.18, respectively, each compared to the first six months of 2009.
During the six months ended June 30, 2010, Magna generated cash from operations before changes in non cash operating assets and liabilities of $858 million, and invested $265 million in non cash operating assets and liabilities. Total investment activities for the first six months of 2010 were $353 million, including $297 million in fixed asset additions, a $54 million increase in investments and other assets and $2 million to purchase subsidiaries.
The Magna Board of Directors declared a quarterly dividend with respect to its outstanding Class A Subordinate Voting Shares and Class B Shares for the quarter ended June 30, 2010. The dividend of U.S. $0.30 per share is payable on September 15, 2010 to shareholders of record on August 31, 2010. The dividend increased from U.S. $0.18 per share for the quarter ended March 31, 2010 given the continued profitability and better expectations for vehicle production in its key markets.
For the full year 2010, Magna expects its consolidated sales to be between $22 billion and $23 billion, based on full year 2010 light vehicle production volumes of approximately 11.5 million units in North America and approximately 12.0 million units in Europe. Full year 2010 average dollar content per vehicle is expected to be between $955 and $985 in North America and between $520 and $545 in Europe. Magna expects its full year 2010 complete vehicle assembly sales to be between $1.8 billion and $2.1 billion. In addition, Magna expect that full year 2010 spending for fixed assets will be in the range of $750 million to $800 million.
This 2010 outlook assumes no significant acquisitions or divestitures. In addition, Magna has assumed that foreign exchange rates for the most common currencies in which Magna conduct business relative to our U.S. dollar reporting currency will approximate current rates.

Click on www.autoserviceworld.com for more news.