TORONTO — Magna International Inc. has cut its revenue forecast for the year due to an expected reduction in global light vehicle production caused by ongoing semiconductor chip shortages that negatively impacted its latest quarterly results.

The Ontario-based auto parts company, which keeps its books in U.S. dollars, says it earned US$424 million or US$1.40 per diluted share in the second quarter.

That compares with a net loss of US$647 million or US$2.17 per share a year earlier when there were unprecedented industry-wide production suspensions due to the COVID-19 pandemic.

Adjusted net income swung to US$426 million or US$1.40 per share, compared with a loss of US$511 million or US$1.71 per share in the second quarter of 2020.

Revenues for the three months ended June 30 more than doubled to US$9.03 billion, from US$4.29 billion as global light vehicle production increased 58 per cent driven by increases in North America and Europe.

Analysts on average expected Magna to report US$1.38 per share in adjusted profits on US$9.29 billion of revenues, according to financial data firm Refinitiv.

Magna is forecasting that 14.4 million North American light vehicles will be built this year, down 7.7 per cent from its previous forecast for 15.6 million vehicles. European production is expected to decrease 2.2 per cent to 18.1 million units while Chinese production should remain steady at 24.7 million.

As a result, it has reduced its forecast for net income by US$200 million to between US$2 billion and US$2.2 billion.

This report by The Canadian Press was first published Aug. 6, 2021.

Companies in this story: (TSX:MG)

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