MGA · Magna International Inc.

Magna International delivered a strong first quarter in 2026, with consolidated sales of $10.4 billion, up 3% year-over-year, driven by favorable foreign currency translation and new program launches, partially offset by lower global light vehicle production. Adjusted EBIT rose 58% to $558 million, and adjusted EBIT margin expanded 190 basis points to 5.4%, exceeding expectations. The margin improvement was broad-based, with operational excellence initiatives contributing approximately 80 basis points, equity income adding 70 basis points (including a favorable commercial settlement at a Power & Vision joint venture), and discrete items such as lower warranty costs contributing 55 basis points. Tariff costs net of recoveries reduced margins by about 15 basis points, but management expects a roughly neutral full-year impact. Adjusted EPS increased 77% to $1.38, reflecting higher earnings and a slightly lower share count. Free cash flow was $372 million, the highest ever for a first quarter, supported by over $450 million in customer recoveries for EV programs. The company reaffirmed its full-year 2026 outlook for adjusted EBIT margin expansion of 40-100 bps, adjusted EPS of $6.25-$7.25, and free cash flow of $1.6-$1.8 billion. Additionally, Magna announced the planned dispositions of its Lighting and Rooftop Systems businesses, expected to close in the second half of 2026, which will streamline the portfolio and remove approximately $350 million in sales with minimal earnings impact. The company also repurchased 7.6 million shares for $440 million in the quarter and plans to repurchase the remaining ~17 million shares under its NCIB during 2026.