Magna International Shares Soar 8% Despite Disappointing Q3, Fueled by Stock Buyback Plan

NEW YORK - Automotive parts manufacturer Magna International Inc. (NYSE:MGA) shares rose 8.4% following the company's announcement of third-quarter earnings and its decision to start share buybacks earlier than planned.
The company reported adjusted earnings of $1.28 per share for the quarter, falling short of analysts' $1.40 estimate. Revenue came in at $10.28 billion, slightly below the consensus estimate of $10.35 billion. This figure represents a 4% decline compared to the same period last year, consistent with a 4% drop in global light vehicle production.
Despite earnings falling below expectations, investors responded positively to Magna's announcement that it would begin a new share buyback program in the fourth quarter of 2024, ahead of the previous schedule. The company's board has approved a Normal Course Issuer Bid to repurchase up to 10% of Magna's publicly traded common shares.
CEO Swamy Kotagiri stated, "While continuously striving to optimize value creation, we are restarting share buybacks in the fourth quarter - earlier than our previous plan."
Magna's third-quarter revenue decline reflects weak light vehicle production in its core regions, with decreases of 6% in North America and China, and 2% in Europe. The company also identified the end of certain programs and divestitures as factors affecting sales.
Magna forecasts revenue of between $42.2 billion and $43.2 billion for the full year of 2024, which is comparable to analysts' expectation of $42.7 billion.
The company announced a quarterly dividend of $0.475 per share, to be paid on November 29, 2024.