Magna Unveils Massive Stock Buyback Covering 10% of Public Float

Magna International Inc. (NYSE:MGA) reported better-than-expected third-quarter 2026 earnings and revenue Friday, raised its full-year free cash flow forecast and announced a new share repurchase program.

The automotive supplier reported adjusted earnings of $1.83 per share, beating analysts’ consensus estimate of $1.59. Adjusted earnings rose 38% from $1.33 per share a year earlier.

Revenue declined 4% year over year to $10.059 billion, topping Wall Street’s estimate of $10.014 billion.

Profit Margins Improve Despite Lower Sales

Adjusted earnings before interest and taxes (EBIT) rose 11% to $683 million from $613 million a year earlier.

Adjusted EBIT margin expanded 90 basis points to 6.8% from 5.9%, driven by productivity improvements, favorable commercial items and tariff recoveries.

Net income attributable to Magna increased to $383 million from $305 million, while GAAP earnings rose 33% to $1.44 per share from $1.08.

The company attributed higher adjusted earnings to improved operating profit, lower interest expenses, a reduced effective tax rate and fewer diluted shares outstanding following repurchases.

Seating Business Struggles, Restructuring Costs Rise

Seating Systems revenue fell 18% to $1.247 billion from $1.520 billion, while adjusted EBIT declined 55% to $28 million from $62 million.

The segment’s adjusted EBIT margin contracted to 2.2% from 4.1%, reflecting lower sales and higher launch costs.

Body Exteriors & Structures revenue edged higher to $4.158 billion from $4.147 billion, while adjusted EBIT increased 27% to $387 million from $305 million.

Power & Vision revenue declined 2% to $3.773 billion from $3.854 billion, although adjusted EBIT rose 22% to $287 million from $236 million.

Complete Vehicles revenue fell 8% to $996 million from $1.085 billion, while adjusted EBIT increased 14% to $33 million from $29 million.

Complete vehicle assembly volumes jumped 76% to 25,800 units from 14,700 units.

Magna recorded $83 million in restructuring charges during the quarter, including $76 million related to European plant closures and significant rightsizing in its Power & Vision segment and $7 million for rightsizing at a European Body Exteriors & Structures facility.

The company cited lower global vehicle production, discontinued programs and divestitures of its Lighting and Rooftop Systems businesses as factors weighing on sales.

Global light vehicle production declined 3%, including decreases of 5% in North America and 7% in China, partially offset by a 3% increase in Europe.

Magna Raises Cash Flow Outlook, Cuts Sales Forecast

Magna lowered its 2026 revenue forecast to $41.2 billion-$42 billion from $41.3 billion-$42.5 billion, citing weaker expected vehicle production in China and unfavorable program mix.

The company narrowed its adjusted earnings forecast to $6.85-$7.15 per share from $6.70-$7.30, maintaining the $7 midpoint.

Magna also narrowed its adjusted EBIT margin forecast to 6.3%-6.5% from 6.3%-6.6%.

The company raised its free cash flow forecast to $1.85 billion-$1.90 billion from $1.75 billion-$1.85 billion.

Third-quarter operating cash flow increased 4% to $950 million from $912 million, while free cash flow rose to $584 million from $572 million.

Free cash flow totaled $1.573 billion in the first nine months, compared with $560 million a year earlier. The latest figure included customer recoveries tied to contract adjustments on certain North American electric vehicle programs.

New Buyback Plan and Dividend

Magna returned $658 million to shareholders during the quarter, including $529 million through the repurchase of 7.9 million shares and $129 million in dividends.

For the first nine months, the company repurchased 22.9 million shares for $1.434 billion and paid $397 million in dividends.

Magna’s board approved a new repurchase program covering approximately 25.8 million shares, representing 10% of its public float, subject to Toronto Stock Exchange approval.

The program is expected to begin Nov. 9, 2026, and end no later than Nov. 8, 2027.

The board also declared a quarterly dividend of 49.5 cents per share, payable Nov. 27 to shareholders of record Nov. 13.

CEO Swamy Kotagiri said disciplined execution and operational improvements are driving stronger earnings, margins and cash generation.

He added that Magna remains focused on finishing 2026 strongly and plans to outline its strategic priorities and longer-term outlook at its Investor Day on Nov. 11.

MGA Price Action: Magna International shares closed at $64.70 on Thursday, up 1.11%, according to Benzinga Pro data.

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