By Adriano Marchese

Magna International expects lower sales over the next two years, below analyst forecasts of growth, as the auto industry faces challenges and uncertainty.

For 2025, the Canadian auto-parts maker said Friday it expects total sales to be between $38.6 billion and $40.2 billion, down from $42.84 billion in 2024.

According to FactSet, Magna was expected to generate similar levels as 2024, declining slightly to $42.74 billion.

For 2026, sales are expected to grow from 2025 to a range of $40.5 billion and $42.6 billion, but missing analyst forecasts of a growth to $43.57 billion.

Magna also set its targets for adjusted earnings before interest and taxes margin, to between 5.3% and 5.8% in 2025, and to grow to between $6.5% and 7.2% the following year.

Adjusted net income is expected to be between $1.3 billion and $1.5 billion, and capital spending of about $1.8 billion this year, but didn't set guidance for 2026 on the metric.

The company forewent providing guidance for a third year as it typically does, citing a number of challenges affecting the auto industry.

Magna said it expects light vehicle production volatility, uncertain electric vehicle take-rates, original equipment manufacturer program recalibration actions, as well as market share shifts and uncertain government policies, all of which have made forecasting more difficult.

It noted that the outlook doesn't incorporate any potential tariffs or changes in tariff rates.

In the fourth quarter, the company posted a lower net income of $203 million, or 71 cents a share, down from $271 million, or 94 cents a share, in the comparable quarter a year ago.

Adjusted earnings were $1.69 a share. According to FactSet, analysts were expecting C$1.53 a share.

Sales rose 2% to $10.63 billion, topping expectations of a decline $10.34 billion.

The company noted that global light vehicle production also increased 2%, including 2% and 10% higher production in North America and China, respectively, while in Europe, production fell by 6%.

Write to Adriano Marchese at adriano.marchese@wsj.com

(END) Dow Jones Newswires

February 14, 2025 07:06 ET (12:06 GMT)

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