Magna International Inc., a Canadian supplier of semiconductors, announced Friday that it achieved a net profit in the second quarter but lowered its revenue projection for full year due to ongoing shortages and disruptions.
This earnings report is released a day following Magna’s successful bid to acquire rival Swedish supplier Veoneer. Magna was awarded a bid of $4.6 billion by Qualcomm, which is 18.4% more than Qualcomm’s.
Magna posted net income of $424 millions for the quarter. This compares to a net loss in 2016 of $647million. The company’s revenue increased more than twice to $9 billion.
The revenue for this year will now be $38 billion to $39.5 billion. This is a significant increase from the previous projection of $40.2 billion-$41.8 billion.
Premarket trading on Friday saw Magna shares fall by four percent to $80.99
Auto production has been hampered by chip scarcity around the globe. Some assembly lines have been halted. However, automakers warn that the shortage may continue, despite the fact that vehicle demand is booming in some markets, including the United States.
Magna stated in a statement that “the second quarter 2021 also included production disruptions due the continuing global shortage of semiconductor chips.”
According to AlixPartners, the global shortage of semiconductor chips will result in automakers losing $110 billion annually.
Supplier Aptiv stated Thursday that it anticipates increased costs from pandemic-related supply chains problems spilling into next year.
Publited Fri, 6 Aug 2021 at 12:06:11, +0000