The auto parts maker anticipates that the strong U.S. dollar, the sale of its fluid pressure and controls business, and GM plant closures will negatively impact its bottom line this year.
January 16, 2019 by Canadian Plastics
Automotive parts supplier Magna International Inc. says it expects its sales this year will be hurt by a stronger U.S. dollar, the sale of its fluid pressure and controls business, and plant closures by automaker General Motors.
“For 2019, our sales are expected to be negatively impacted by the announced disposition of our Fluid Pressure & Controls business, net of acquisitions, and by foreign currency translation, reflecting the stronger U.S. dollar,” Magna said in a statement. “Excluding these items, our total sales are expected to increase in 2019, compared to 2018. Our North American business reflects the negative impact of the recently announced General Motors assembly plant actions.”
Aurora, Ont.-based Magna, which reports in U.S. dollars, says it expects total sales of US$40.2 billion to US$42.4 billion for 2019.
Magna expects net income for the year to total US$2.1 billion to US$2.3 billion, and capital spending for 2019 is forecast to be about US$1.7 billion.
Magna signed a deal in September to sell its fluid pressure and controls business to Hanon Systems, a South Korea-based company, for approximately US$1.23 billion. The deal is expected to close in the first quarter of 2019.