Magna swings to 3Q loss on charges, lower sales

"We are preparing ourselves for a significant downturn," Donald J. Walker, Magna's co-chief executive, told analysts on a conference call. The company said it will search for more ways to cut costs.

Magna's results come a day after automakers reported their October U.S. sales that fell a combined 32 percent from a year ago to the lowest total in more than 17 years.

Aurora, Ontario-based Magna isn't the only auto supplier hurting because of vehicle production declines. Tenneco Inc., American Axle & Manufacturing Holdings Corp., TRW Automotive Holdings Corp., Visteon Corp. and Lear Corp. have all reported quarterly losses in recent weeks.

Magna's loss amounted to $1.93 per share for the three months ended Sept. 30. It had earned $155 million, or $1.38 per share, in the same quarter in 2007.

The latest results included impairment and restructuring charges partly offset by a foreign currency gain. The net effect reduced earnings by $234 million, or $2.10 per share. Excluding those items, the company posted an adjusted profit of 17 cents per share for the quarter.

Sales slid 9 percent to $5.53 billion from $6.08 billion in the year-ago period.

The adjusted profit fell significantly short of average Wall Street predictions. Analysts polled by Thomson Reuters expected a profit of 90 cents a share, excluding one-time items, on $5.49 billion in sales.

The news sent Magna shares down 39 cents, of 1.1 percent, to $33.99 in New York trading Tuesday, after tumbling as low as $31.16 earlier in the session. Over the past 52 weeks, the company's shares have traded between $28.28 and $99.38.

Magna said its North American average dollar content per vehicle was flat for the quarter, while its European average dollar content per vehicle rose 10 percent.