Magna International Inc.’s profit increased by 24% in the second quarter, with earnings climbing to $349 million compared with $282 million in the second quarter last year. Magna, which manufactures parts for major auto manufacturers and assembles complete vehicles, revealed that it was purchasing the controlling minority stake in its electric car business. It also divulged that its revenue rose to $7.7 billion from $7.3 billion for the period that ended in June.
Magna announced that it will buy Magna E-Car Systems’ controlling 27% partnership interest for $74.67 million from a company affiliated with founder Frank Stronach.
Presently, Magna is the owner of the remaining 73% non-controlling stake. In a statement last Thursday, Magna CEO Don Walker said that the company is “pleased” to get back control of Magna E-Car's assets and business.
The company anticipates that in the future, hybrid and electric vehicle production will continue to expand throughout the world. It also said that Magna would be able to take advantage of this development by providing components, systems and engineering services to its customers.
Magna had modified its 2012 operating margin from the "low 5% range” to the "low to mid 5% range.” It also asserted that total sales outlook is between $29 billion and $30.5 billion. In the quarter, Magna’s complete vehicle assembly sales declined by 11% to $645 million. Meanwhile, its volumes have fallen by 6% to about 33,000 units. Magna said that vehicle production throughout the industry rose by 28% in North America compared to the year-ago quarter. Meanwhile, sales fell by 7% in Europe.