Magna (MGA) Q1 2026 Earnings Call Transcript

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Date

Friday, May 1, 2026 astatine 8 a.m. ET

Call participants

• Chief Executive Officer — Seetarama Kotagiri

• Chief Financial Officer — Philip Fracassa

• Vice President, Investor Relations — Louis Tonelli

Full Conference Call Transcript

Seetarama Kotagiri: Thank you, Louis. Good morning, everyone, and convey you for joining america today. We admit your clip and interest. Let's get started. Overall, I was precise pleased with our beardown Q1 2026 results, wherever we drove borderline enlargement with disciplined execution. In the quarter, income were up 3% with weighted maturation implicit marketplace of 3%. Adjusted EBIT was up 58% with adjusted EBIT borderline expanding 190 ground points to 5.4%, and adjusted EPS roseate 77% to $1.38. We proceed to show traction from our operational excellence initiatives crossed the company. Our robust currency travel reflects improved operating performance. We generated $677 cardinal successful operating currency travel and $372 cardinal successful escaped currency flow.

In summation to beardown net growth, our squad did a large occupation securing further commercialized recoveries related to erstwhile EV investments. Moody's precocious reaffirmed its A3 recognition standing for Magna and improved the outlook to Stable. We ended the 4th with a 1.5x standing bureau leverage ratio, up of our expectations with $1.6 cardinal successful currency connected hand. Our 2026 outlook reinforces our assurance successful our margin, EPS and currency travel trajectory. We proceed to expect weighted income maturation implicit marketplace of astir 1.5% astatine the midpoint. We are reaffirming our anterior outlook ranges for adjusted EBIT margin, adjusted EPS and escaped currency flow.

While the concern successful the Middle East introduces immoderate uncertainty, we person a way grounds of navigating outer disruptions, and we are assured successful our quality to execute connected what's wrong our control. Importantly, we expect to mitigate astir outgo headwinds implicit time. We stay focused connected executing our proven superior allocation framework. We proceed to put successful our concern to enactment further profitable integrated maturation portion returning $575 cardinal successful capital, including $440 cardinal successful banal repurchases to shareholders successful the quarter. At the extremity of March, we had astir 17 cardinal shares remaining and disposable for repurchase nether our NCIB. We program to repurchase the remaining shares during 2026.

We precocious announced the borderline accretive dispositions of our lighting and rooftop systems businesses. The transactions are accordant with our long-standing principles astir portfolio management. We person highlighted successful the past that we negociate our portfolio utilizing an nonsubjective acceptable of criteria and regularly measure our merchandise lines based connected their addressable markets, marketplace positions and returns. Specifically, we privation to enactment successful meaningful oregon increasing markets with unchangeable oregon increasing nett pools, beardown oregon a wide way to beardown marketplace positions, profitable maturation and sustainable competitory advantage. This has agelong been a cardinal rule that ensures that we negociate Magna for semipermanent success.