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Magna International Q2 earnings call highlights. July 31, 2026 Key points. * Magna delivered a strong second quarter: Sales rose 3% to $11 billion, adjusted EBIT increased 16% to $677 million, adjusted EPS climbed 29% to a record $1.86, and free cash flow more than doubled to $617 million. Margin gains were driven primarily by operational improvements and cost reductions. * The company raised its 2026 outlook for adjusted EBIT margin to 6.3%-6.6%, adjusted EPS to $6.70-$7.30, and free cash flow to approximately $1.8 billion. Magna expects to maintain 1%-3% growth over market, excluding its Complete Vehicles segment, despite declining global vehicle production. * Magna returned $598 million to shareholders in the quarter, including $465 million in share repurchases, and plans to complete its remaining buyback authorization by early November. It is also exploring opportunities in robotics, automation and data centers, with more details expected at its November investor day. * Five stocks we like better than Magna International. Magna International NYSE: MGA reported stronger second-quarter results for 2026, citing operational improvements, margin expansion and cash generation that led the automotive supplier to raise its full-year outlook. Sales rose 3% year over year to $11 billion in the quarter, while adjusted EBIT increased 16% to $677 million. Adjusted EBIT margin expanded 70 basis points to 6.2%. Adjusted earnings per share climbed 29% to a second-quarter record of $1.86, and free cash flow more than doubled from a year earlier to $617 million. "These results demonstrate continued traction on our operational excellence activities and ability to deliver improved performance in a dynamic environment," President and CEO Swamy Kotagiri said during the company's earnings call. Operational performance outpaces production trends. Magna said second-quarter organic sales increased about 2% excluding currency translation, compared with a 2% decline in global light-vehicle production. On a Magna-weighted basis, vehicle production fell about 1%, resulting in consolidated growth over market of 3%, or 4% excluding the Complete Vehicles segment. Chief Financial Officer Phil Fracassa said new program launches, including the Jeep Cherokee Recon, Zeekr 9X and Ram 1500, as well as favorable mix, added to sales. These gains were partially offset by the end of production for certain programs, including the Ford Escape, lower industry production and customer price concessions. Foreign currency translation added $172 million to sales, reflecting a weaker U.S. dollar compared with the prior-year period. Complete Vehicles sales declined organically despite higher unit volumes, as sales recognized on a value-added basis from newer Chinese OEM assembly programs did not fully offset lower sales from other full-cost programs and lower engineering revenue. Operational excellence and other cost-reduction actions were the largest source of margin improvement. Fracassa said operational performance, volume and other factors contributed about 75 basis points to margin, with operational excellence accounting for a majority of that benefit. Prior restructuring actions, foreign-exchange transaction gains and incremental margin on higher organic sales also supported profitability. Lower net tariff costs added about 25 basis points to second-quarter margin, while higher equity income contributed roughly 10 basis points. Unfavorable commercial items reduced margins by approximately 40 basis points. During the question-and-answer session, Fracassa said tariff recoveries arrived more quickly than they did last year. Magna expects the full-year net tariff impact to be broadly neutral, potentially slightly positive, after a modest benefit in the first half and expected headwinds later in the year. Cash flow, buybacks and balance sheet. Cash from operations totaled $954 million, up $327 million from the prior year, driven by higher earnings and working-capital performance. Magna spent $269 million on capital expenditures, equal to 2.4% of sales, and generated $617 million of free cash flow. The company returned $598 million to shareholders during the quarter, including $133 million in dividends and $465 million in share repurchases. Magna repurchased 7.4 million shares under its normal course issuer bid, leaving slightly more than 9 million shares available at the end of June. Management said it plans to repurchase the remaining shares before the authorization expires in early November. At quarter end, Magna had nearly $5 billion in total liquidity, including $1.4 billion in cash. Its rating-agency debt-to-EBITDA leverage ratio was 1.4 times. S&P reaffirmed the company's A-minus credit rating and assigned a stable outlook, following Moody's earlier affirmation of its A3 rating with a stable outlook. Raised 2026 outlook. Magna narrowed and raised its full-year targets for adjusted EBIT margin, adjusted EPS and free cash flow. The company now expects: * Adjusted EBIT margin of 6.3% to 6.6%, up 15 basis points at the midpoint from its previous outlook and 85 basis points above 2025. * Adjusted EPS of $6.70 to $7.30, representing a $0.25 midpoint increase from the prior forecast. * Free cash flow of about $1.8 billion at the midpoint, $100 million higher than its May outlook. * Positive growth over market of 1% to 3% excluding Complete Vehicles. The company updated its production assumptions by increasing North American production by 100,000 units and European production by 200,000 units, while reducing its China forecast by 800,000 units. Magna expects global vehicle production to decline for the full year, including an estimated 2% decline on a Magna-weighted basis. Fracassa said the updated sales outlook mainly reflects foreign-exchange assumptions and the earlier-than-expected closing of the lighting and rooftop divestitures. The divestitures are expected to reduce second-half Power & Vision revenue by just over $400 million year over year, about $50 million more than previously expected due to earlier closing timing. New awards and adjacent-market strategy. Magna highlighted recent business awards, including a driver and occupant monitoring system program with a European OEM and an 800-volt two-speed e-drive program with Chery Automobile. The Chery award follows the launch of Magna's hybrid drive system for the Jetour T2. Kotagiri said Magna is also evaluating opportunities outside traditional automotive markets, including robotics, automation, data centers and other adjacent sectors. He said the company has secured initial project wins but is not pursuing diversification simply for its own sake. "Any opportunity must meet clear returns-based criteria, fit with our capabilities, and give Magna a credible right to win," Kotagiri said. Magna plans to provide additional details on its adjacent-market strategy, project awards and potential growth path at its investor day in November. About Magna International (NYSE:MGA). Magna International Inc is a leading global automotive supplier specializing in the design, engineering, and manufacturing of vehicle systems, assemblies, modules, and components. Headquartered in Aurora, Ontario, the company partners with major original equipment manufacturers (OEMs) to develop technologies and solutions that enhance vehicle performance, safety, comfort, and fuel efficiency. Magna's broad portfolio encompasses body exteriors and structures, powertrain systems, seating and interiors, roof systems, mirror systems, and advanced driver assistance systems (ADAS). The company operates more than 350 manufacturing and assembly facilities and over 100 innovation centers across 27 countries, serving customers in North America, Europe, Asia, South America, and Africa. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. Before you consider Magna International, you'll want to hear this. 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Magna has secured an 800-volt electric drive programme award with Chinese automaker Chery. The Canadian automotive supplier will produce a 250kW 800V 2-speed eDrive system at its new Wuhu facility in China. The system is engineered to deliver high performance and efficiency through a compact, integrated design. It supports battery electric vehicle applications while enabling flexible integration across global platforms. The award builds on Magna's growing presence in China. The company has also started series production of its DHD Duo dedicated hybrid drive system with Chery on the Jetour G700, a programme first announced in 2024. Diba Ilunga, President of Magna Powertrain, said the award reflects the company's ability to support manufacturers across electric, hybrid, and mixed technology strategies.

New driver monitoring tech means your mirrors look back at you. AI Summary - NZ Perspective Magna has developed a new mirror-integrated camera system designed to detect driver distraction, drowsiness, or fatigue, enhancing vehicle safety. This technology is part of a broader trend in Advanced Driver Assistance Systems (ADAS) aimed at improving road safety for drivers, including those in New Zealand. Original Excerpt Magna's new mirror contains camera that detects driver distraction, drowsiness or fatigue As car makers push for greater safety and automation, are drivers ready to hand over full control? Robotics in the form advanced driver assistance systems (ADAS) have been here in Europe sin Read the full article Published by Autocar Stay ahead - browse NZ's largest range of tyres from the world's leading brands.