Canadian auto parts supplier Magna International reported lower-than-expected first-quarter profit and reduced its full-year overall sales forecast on Friday, citing challenges from supply chain disruptions. The Aurora, Ontario-based company also recorded asset impairments and restructuring costs of $316 million related to electric-vehicle startup Fisker.
Magna had signed agreements with Fisker in 2020 to engineer and manufacture its Ocean SUV. However, Fisker has faced uncertainties after talks with a large automaker for a potential investment collapsed in March.
Peer company Aptiv also cut its annual sales forecast and announced plans to reduce equity interest in its self-driving joint venture, Motional, with Hyundai Motor.
Auto parts suppliers are experiencing lower-than-expected demand for their EV components as carmakers focus on producing affordable hybrids. Supply chain constraints and labor shortages, which began during the pandemic, continue to impact the auto industry’s efforts to ramp up production.
Magna now expects full-year 2024 sales of $42.6 billion to $44.2 billion, down from its prior forecast range of $43.8 billion to $45.4 billion. The company earned $1.08 per share in the first quarter on an adjusted basis, below analysts’ average estimate of $1.24 per share, according to LSEG data.