Magna Falls Most Since 2011 as Currency Rates Crimp Revenueby
Weaker euro, Canadian dollar erode what would have been a gain
Auto-parts supplier's board approves buyback of 9.9% of shares
Magna International Inc. slid the most in more than four years after the largest North American auto-parts supplier said currency exchange rates trimmed about $870 million from third-quarter revenue, which fell short of analysts’ estimates.
The shares fell 10 percent to $47.35 at the close in New York for the steepest one-day drop since August 2011. The stock has declined 13 percent this year.
Magna’s quarterly revenue shrank 7.1 percent to $7.7 billion, trailing the $7.8 billion average of 11 estimates compiled by Bloomberg. Without the effect of currencies, particularly the euro and Canadian dollar, sales would have risen 3 percent, the Aurora, Ontario-based company said in a statement Thursday. The parts supplier gets more than two-thirds of its revenue outside the U.S.
Profit from continuing operations fell to $470 million, or $1.13 a share, from $487 million, or $1.14, a year earlier, the company said.
Magna said its board approved a buyback of as many as 40 million shares, or 9.9 percent of its outstanding common stock. The shares rose in each of the past three years as the company rode a boom in North American sales of cars and light trucks.
Another auto-parts supplier, Visteon Corp., rose to a record share price after beating third-quarter estimates and raising a 2015 forecast.
The maker of vehicle-cockpit electronics climbed 4.2 percent to $113.84, the highest closing price since the shares began trading in September 2010.
Visteon reported profit excluding some items of 56 cents a share, exceeding the 30-cent average of eight analyst estimates. Sales rose 1.9 percent to $808 million, compared with an average projection of $753 million. The Van Buren Township, Michigan-based company also boosted full-year forecasts for its electronics group to adjusted profit of as much as $285 million on sales of up to $3.1 billion, from maximums of earnings of $265 million and revenue of $3 billion.