Canadian auto supplier Magna International Inc. rebuilt its profits in the third quarter, generating net income of $289 million compared with near break-even earnings of $11 million during the same period last year.
Revenue increased 17 percent to $9.3 million as global light vehicle production rose 24 percent, Magna said in a statement Friday.
The company slightly lowered its annual sales forecast as supply chain snags and higher utility costs keep global vehicle production under pressure. Magna now sees its annual sales in the range of $37.4 billion and $38.4 billion, compared with its prior forecast of $37.6 billion and $39.2 billion.
Despite the improved third quarter, Magna said net income for the first nine months of 2022 still plunged 53 percent to $497 million.
Europe’s energy crisis has exacerbated power and logistics costs for auto firms, even as they reel from a series of issues over the past two years, including semiconductor chip shortages, that have repeatedly delayed vehicle production.
Automakers have also flagged that inflation is beginning to take a toll on their balance sheets as they struggle with parts shortage and escalating raw material and energy costs.
“We continue to experience higher commodity, freight and energy costs, as well as wages, in most markets in which we operate, with such pressures expected to persist into 2023,” Magna said in the Friday statement.
The company, which makes a wide variety of parts such as body structure, chassis and powertrain for customers including Ford Motor Co. and Volkswagen Group, said the forecast cut reflects an expected drop in vehicle production in North America and Europe and higher operating inefficiencies.
Magna, based near Toronto, ranks No. 4 on the Automotive News list of the top 100 global suppliers with worldwide sales to automakers of $36.2 billion in 2021.
Reuters contributed to this report.
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