TORONTO -- Auto parts maker Magna International Inc. (TSX:MG) beat analyst expectations in the second quarter as its European arm outperformed the region's generally weak market and its North American operations benefited from strong vehicle demand.
During the three months ended June 30, its sales rose to $8.96 billion, up from $7.72 billion a year earlier and a Magna record for the second quarter. Profit also grew, rising to US$415 million profit from $349 million.
The company, based in Aurora, Ont., said its production sales in Europe were up 14 per cent from the same quarter last year, even though overall European vehicle production was down by one per cent.
"It has taken a lot of hard work and there is certainly more to come but we are headed in the right direction in Europe," chief executive Don Walker told analysts Friday.
"We continue to expect improved earnings for the full 2013 compared to 2012 in our Europe segment."
North America accounted for $4.59 billion of sales during the quarter, or 51.2 per cent of Magna's total in the second quarter. Europe contributed $3.76 billion (41.9 per cent) and the rest of the world accounted for $609 million.
"We achieved this sales increase in a period when vehicle production increased seven per cent in North America and declined one per cent in Europe, both relative to the second quarter of 2012," the company said in a statement.
The Aurora, Ont.- based company, which reports in U.S. currency, said its net income amounted to $1.78 per diluted share, in the second quarter, compared to $349 million, or $1.48 per share in the same quarter last year.
Magna said Friday it currently expects between $33.3 billion and $34.7 billion of sales in 2013. The range is about $700 million higher than Magna's outlook in May when its first-quarter results were issued.
Sales were more than $167 million above a Thomson Reuters composite analyst estimate of $8.795 billion while earnings were above estimates of $1.70 per share of net income and $1.63 per share of adjusted earnings.
Apart from the improved operational results, Magna's earnings per share were increased by a share buyback program that reduced the average number of shares outstanding during the quarter.
The company credits a seven per cent rise in North American vehicle production during the three-month period while European production dipped one per cent.
Magna says complete vehicle assembly sales increased 23 per cent to $796 million in the quarter while complete vehicle assembly volumes increased 17 per cent to approximately 39,000 units.
On Thursday, the Magna board of directors declared a quarterly dividend of 32 cents payable on Sept. 16.
Magna has 123,000 employees at 314 manufacturing operations and 89 product development, engineering and sales centres in 29 countries.
