Why Magna International Stock Crashed Today
When Magna International (NYSE: MGA) warned investors about its upcoming quarterly results on Jan. 24, the stock took a hit. But a stock market rally since then helped the shares regain that loss. That is, until the automotive industry supplier released those fourth-quarter and full-year 2022 results this morning. That sent shares tumbling today, with a drop of 16% as of 2:15 p.m. ET.
2022 sales of $37.8 billion were in line with the guidance from two weeks ago as was the lowered level of profitability. Magna had said its adjusted earnings before interest and taxes (EBIT) margin would be below the 4.8% to 5% range projected in its November 2022 outlook. Magna reported that metric to be under 4.4% for 2022.
But the problem investors had with the results was the outlook for 2023 and beyond. Magna said costs will continue to run high, with CFO Patrick McCann saying on the conference call for investors, "We expect continued input cost pressures in 2023." McCann added that the company expects its EBIT margin to be between 4.1% and 5.1% in 2023 when analysts expected 5.6%.
Source Fool.com
