Shares of auto parts supplier Magna International Inc. (MGA) surged over 8% on Thursday, November 1st, despite the company reporting lower-than-expected earnings for the third quarter of 2024. While Magna's adjusted earnings per share of $1.28 missed the consensus estimate of $1.41, and revenue of $10.28 billion slightly lagged forecasts, investors cheered the company's ability to maintain strong margins and shareholder-friendly capital allocation plans.
Magna cited a 4% decline in global vehicle production volumes, including a 6% drop in North America and China, as a key headwind weighing on its topline performance. However, the company effectively controlled costs and sustained an adjusted EBIT margin of 5.8% for the quarter, matching the prior-year level. Notably, Magna's Power & Vision division posted higher margins, helping to offset some of the pressure from lower sales.
In a move viewed as a positive signal of confidence in its cash flow outlook, Magna announced that its board had approved a new share repurchase program. The program will allow the company to buy back up to 10% of its public float, with buybacks expected to commence in the fourth quarter – ahead of the previously anticipated schedule.
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