Magna lowers production forecast on expected hit from tariffs
- August 8, 2018
Tariffs imposed by the Trump administration have led Canadian auto parts maker Magna to lower its yearly North American production forecast.
The company, which reported second-quarter profit below analysts’ estimates on tepid demand in North America, its biggest market, said it expects light vehicle production in the region to be 17.2 million, down from its previous forecast of 17.3 million.
The Trump administration has come under heavy criticism from auto makers, foreign governments and others as it considers tariffs of up to 25 per cent on U.S. imports of autos and car parts.
Magna said in May it is “cautiously optimistic” that talks to renegotiate the North American Free Trade Agreement (NAFTA) would result in a competitive trade deal.
During the second quarter, Magna’s light vehicle production increased 4 per cent in Europe but declined 1 per cent in North America.
Magna said total sales during the quarter jumped 12.5 per cent to $10.28 billion.
Net income attributable to Magna rose to $626 million or $1.77 per share, in the quarter ended June 30, from $548 million, or $1.44 per share, a year earlier. Excluding items, the company earned $1.67 per share. Analysts, on an average, had expected the company to report a profit of $1.72 on a revenue of $10.51 billion, according to Thomson Reuters I/B/E/S.