A worker in a Magna plant in Puebla, Mexico, in 2015.Brett Gundlock/ Boreal Collectiv
Magna International Inc.’s MG-T stock price fell after the auto parts company swung to a loss in its latest quarter and lowered its sales outlook for the year.
The Aurora, Ont.-based company’s shares were down more than six per cent at $81.15 on the Toronto Stock Exchange on Friday morning.
Magna reduced its North American production forecast by around 100,000 units to 14.9 million and lowered its European forecast by 200,000 units to 16.6 million, “both reflecting current market conditions,” said Philip Fracassa, chief financial officer, during the earnings call on Friday.
Its China production assumptions remain unchanged at 32 million.
In its updated outlook, Magna says it’s now expecting sales for 2026 to total between US$41.5-billion and US$43.1-billion, down from its earlier forecast for between US$41.9-billion and US$43.5-billion.
On Friday, Magna also reported a loss attributable to the company of US$12 million in its first quarter compared with a profit of US$146-million a year earlier.
The automotive supplier, which keeps its books in U.S. dollars, said the loss amounted to 4 cents per diluted share for the quarter ended March 31 compared with a profit of 52 cents per diluted share a year ago.
On an adjusted basis, Magna says it earned US$1.38 per share in the quarter compared with an adjusted profit of 78 cents US per share a year earlier.
Sales totalled US$10.38-billion for the quarter, up from US$10.07-billion in the first quarter of 2025.
The auto industry is bracing for more potential headwinds as the review of the Canada-United States-Mexico trade agreement gets under way in July.
So far however, Magna has for the most part remained sheltered from the worst impacts of tariffs, as it boosted its compliance with CUSMA last year. But that could change, depending on how the negotiations unfold.
Fracassa said the company is expecting a similar annual tariff impact compared with last year, at about US$160-million.
That comes as Magna is expecting tariff refunds from the U.S. after the U.S. Supreme Court deemed President Donald Trump’s tariffs unconstitutional earlier this year.
“We are working to file those refund claims as we speak,” Fracassa said.
He said those refunds would make up for roughly half of the company’s tariff cost.
“As those refunds come in, we’ll obviously work with our customers on that, given that they covered about 80 per cent of our tariff costs last year,” he said.
Meanwhile, Magna is “pretty well protected” from energy and supply-related price swings in the near term stemming from the ongoing war in the Middle East, Fracassa said.
Its stainless aluminum supply chain, for instance, is largely sheltered as the company passes any cost increases on to its customers. However, there will be some impacts on its freight and resin costs.
“Oil stays high, resin stays high,” Fracassa said.
High oil prices have started to affect businesses as the Iran war enters its third month and the narrow but crucial Strait of Hormuz effectively remains shut – blocking oil tankers from passing the waterway.
Magna said it is better positioned on energy, compared with 2022, when Russia invaded Ukraine, which sent shocks to global energy prices.
“We’ve hedged about two-thirds of our electricity and natural gas spend in Europe for this year and about 50 per cent hedged for next year,” Fracassa said. “So swings and costs, near term, we’re pretty well protected there as well.”
Magna is one of the world’s largest automotive suppliers and has operations across 28 countries around the world.