Magna International Inc. MG-T cut its outlook for the year because of lower-than-expected global auto production and increased costs as it reported a first-quarter profit of US$364-million.
Magna, which keeps its books in U.S. dollars, said the profit amounted to US$1.22 per diluted share for the quarter ended March 31, down from a profit of US$615-million or US$2.03 per diluted share a year earlier.
The Aurora, Ont.-based auto parts company said it expects supply constraints to continue for the remainder of 2022, particularly in semi-conductors.
It also said its operations in Russia “remain substantially idle.” In early March, Magna said it would pause operations at its six facilities in Russia in response to the country’s invasion of Ukraine.
The plants in Russia make parts primarily for Hyundai and Volkswagen cars and employ around 2,000 people.
The mandatory COVID-19 lockdowns and stay-at-home orders in China are also putting a strain on the business, and have been impacting sales and production, the company said Friday.
Magna’s first-quarter sales totalled US$9.64-billion, down from US$10.18-billion in the first three months of 2021.
On an adjusted basis, Magna said it earned US$1.28 per diluted share, down from an adjusted profit of US$1.86 per diluted share a year earlier.
In its outlook for the full year, Magna said it now expects sales to total between US$37.3-billion and US$38.9-billion, down from an earlier forecast of between US$38.8-billion and US$40.4-billion.
Net income attributable to Magna is expected to be between US$1.3-billion and US$1.5-billion, down from its previous forecast of between US$1.7-billion and US$1.9-billion, according to the updated outlook.
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