Auto parts supplier Magna International recently reported its second-quarter results, falling short of analysts‘ estimates. The company, which supplies parts to automakers such as BMW, Mazda, and Ferrari, cited production stoppages for certain vehicles and lower volumes of automobiles that it assembled as the primary reasons for the miss.
Magna’s complete vehicles unit, which assembles models for various carmakers, saw a significant decline in quarterly sales, dropping by 18.6% to $1.24 billion. This decrease was attributed to the end of production for certain programs and lower assembly volumes, including the BMW 5-Series.
The demand for Magna’s parts and services had been on the rise in recent years. However, the company has been impacted by automakers shifting their focus away from expensive electric vehicle plans to prioritize gas-powered models. This shift in strategy has affected Magna’s sales and profitability.
In contrast, rival company Aptiv beat Wall Street expectations for quarterly profit. However, Aptiv’s revenue from its segment that produces electrical components declined by 3% due to reduced production by some customers.
Magna also faced challenges related to asset impairments and restructuring costs of $316 million in connection with troubled electric vehicle startup Fisker. As a result, the company revised its 2026 sales forecast range to $44.0 billion to $46.5 billion, down from its previous projection of $48.8 billion to $51.2 billion.
On an adjusted basis, Magna earned $1.35 per share in the second quarter, falling short of analysts‘ estimates of $1.44 per share. Quarterly revenue also saw a slight decline to $10.96 billion, missing expectations of around $11 billion.
Despite the disappointing results, Magna remains a key player in the auto parts industry, supplying components to some of the world’s leading automakers. The company’s ability to adapt to changing market conditions and maintain strong relationships with its customers will be crucial in navigating future challenges and opportunities in the automotive sector.