- The stock price of Magna (MGA) fell by 7.21% in the most recent trading session. This is why.
The stock price of Magna (MGA) fell by 7.21% in the most recent trading session.
Why: Magna International announced that it has updated its 2022 outlook to reflect an expected Adjusted EBIT Margin below the range disclosed in its announcement dated November 4, 2022.
Based on preliminary unaudited results, the total sales for 2022 were approximately $37.8 billion, compared to the range of $37.4 to $38.4 billion disclosed in its November outlook. But the Adjusted EBIT Margin for 2022 is expected to be approximately 4.3%, which is below the 4.8% to 5.0% range disclosed in its November outlook.
The reduced Adjusted EBIT Margin reflects a number of items, including a decreased contribution on lower sales; higher net warranty costs; provisions against certain accounts receivable and other balances; higher net engineering expense due to the revised timing of both spending and customer recoveries; operating underperformance at certain facilities; and higher labor and other operational inefficiencies as a result of the continued unpredictability of our customers’ production schedules. The adjusted net income attributable to Magna is also impacted by the factors above.
Magna is going to report its financial results for the fourth quarter and full year of 2022 on February 10, 2023.