First-quarter net income at Magna International Inc., North America's largest auto supplier, fell 43 per cent from a year earlier to $209 million (all figures in USD) as inflationary pressures took a bite out of the company's bottom line.
The Canadian supplier said higher labour, energy and engineering costs cut into its profit margin, as did lower scrap steel and aluminum sales and inefficiencies at a facility in Europe.
But sales in the period rose 11 per cent from a year earlier to $10.67 billion, benefiting from improved light-vehicle production in North America and Europe and the launch of new programs. And Magna increased its financial outlook for the year on better global vehicle production estimates and as the company works to reduce expenses and improve its cost structure, CEO Swamy Kotagiri said.
"We have remained focused on driving operational improvements, working with our customers to recover inflationary costs and executing on our strategy to deliver long-term value," Kotagiri said on a Friday call with analysts.
Magna shares jumped 6.3 per cent to $53.42 in midday trading.