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Magna International reported a 3% rise in first quarter sales and a sharp improvement in adjusted profitability, even as global light vehicle output declined, while maintaining its full-year financial targets.
The Canada-based automotive supplier generated revenues of US$10.38bn in the three months to 31 March 2026, despite a 7% drop in global light vehicle production.
Favourable currency movements added $520m to reported sales, with new programme launches – including complete vehicle programmes with value-added contractual arrangements – also providing support.
Those tailwinds were partially countered by programme discontinuations, weaker vehicle production across North America, Europe and China, reduced engineering revenue, and customer price concessions.
Pre-tax income from operations fell sharply to $87m from $225m a year earlier, primarily due to a $485m pre-tax loss on assets held for sale connected to the planned disposals of Magna's Lighting and Rooftop Systems businesses.
Net loss attributable to the company came in at $12m, against net income of $146m in the prior-year period.
On an adjusted basis, however, earnings improved considerably.
Adjusted EBIT rose 58% to $558m, with the corresponding margin widening by 190 basis points to 5.4%, driven by productivity gains, higher equity income, reduced warranty costs, and currency tailwinds.
The company also returned $575m to shareholders via dividends and share buybacks during the quarter.
Magna left its 2026 guidance broadly intact, continuing to project total sales of between $41.5bn and $43.1bn, with an adjusted EBIT margin in the range of 6% to 6.6%.
The company noted that its performance remains sensitive to light vehicle production volumes across its key markets, as well as customer and programme mix, supply chain conditions, tariffs, commodity costs, and broader macroeconomic factors affecting vehicle demand.
It cautioned that the outlook could shift if underlying market conditions or assumptions change.
Magna CEO Swamy Kotagiri said: “We delivered a strong start to 2026, driven by disciplined execution, margin expansion and robust free cash flow generation. Our actions to further refine our portfolio, including the announced dispositions within Power & Vision, reinforce our focus on long-term value creation.
“As we move forward, we are maintaining our positive 2026 outlook, and our priorities remain clear: expanding margins, generating strong free cash flow and returning capital to shareholders, while navigating a dynamic global environment.”
NB. Magna results reported in US dollars (not Canadian dollars).
"Magna posts higher Q1 sales despite output fall" was originally created and published by Just Auto, a GlobalData owned brand.
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