Magna International Inc. has reported financial results for the fourth quarter and year ended Dec. 31, 2017.
“I’m pleased with our 2017 results which were records for sales, earnings per share and operating cash flow. Looking forward, we continue to execute our strategy for long-term growth focused on the future of mobility. We have also realigned our management structure to further enhance collaboration and strengthen our position as a provider of mobility solutions,” said Don Walker, Magna’s CEO.
The company posted record sales of $10.39 billion for the quarter ended Dec. 31, 2017, an increase of 12 percent over the fourth quarter of 2016. The sales increase was achieved in a period in which European light vehicle production increased 7 percent and North American light vehicle production decreased 5 percent, each relative to the fourth quarter of 2016.
During the fourth quarter of 2017, income from operations before income taxes was $761 million, compared to $646 million in the fourth quarter of 2016. Net income attributable to Magna International Inc. was $556 million in the fourth quarter of 2017 compared to $478 million in the fourth quarter of 2016. Diluted earnings per share were $1.53 in the fourth quarter of 2017 compared to $1.24 in the fourth quarter of 2016, reflecting an increase in net income attributable to Magna International Inc. and a 6 percent decrease in the weighted average number of diluted shares outstanding during 2017.
Adjusted EBIT in the fourth quarter of 2017 increased 16 percent to $809 million, compared to $696 million for the fourth quarter of 2016. Magna’s Europe and Asia segments each posted higher Adjusted EBIT, and Adjusted EBIT as a percentage of sales, compared to the fourth quarter of 2016. For the fourth quarter of 2017, adjusted diluted earnings per share increased 20 percent to $1.57 compared to $1.31 for the fourth quarter of 2016.
For the year, Magna posted record sales of $38.95 billion, an increase of 7 percent, compared to the year ended Dec. 31, 2016. European light vehicle production increased 4 percent and North American light vehicle production decreased 4 percent in 2017 compared to 2016.
Income from operations before income taxes was $3 billion, an increase of $219 million. Net income attributable to Magna International Inc. was $2.21 billion and diluted earnings per share were $5.90, increases of $175 million and 74 cents, respectively, compared to 2016.
Adjusted EBIT increased 7 percent to $3.11 billion in 2017, compared to $2.90 billion for 2016. Magna’s Asia and Rest of World segments each posted higher Adjusted EBIT, and Adjusted EBIT as a percentage of sales, compared to 2016.
Our adjusted diluted earnings per share increased 14 percent to $5.96 for 2017 compared to $5.23 for 2016.
Return of capital to shareholders
During the three months and year ended Dec. 31, 2017, Magna repurchased 6.7 million shares for $366 million and 26.2 million shares for $1.27 billion, respectively. In addition, the company paid dividends of $95 million and $400 million for the three months and year ended Dec. 31, 2017, respectively.
Magna’s board of directors declared a quarterly dividend of 33 cents with respect to outstanding Common Shares for the quarter ended Dec. 31, 2017. This dividend is payable on March 23, 2018, to shareholders of record on March 9, 2018.
“Our strong earnings growth and cash flow have enabled us to return significant amounts of capital to shareholders. Our 20 percent dividend increase, the ninth consecutive annual dividend increase, reflects the confidence that both management and our board have in Magna’s future,” said Vince Galifi, Magna’s chief financial officer.
