Magna plans cost-cutting measures to cushion tariff hit after profit misses estimate
(Reuters) -Canadian auto parts supplier Magna International said on Friday that it plans to implement cost-saving measures to cushion the hit from U.S. President Donald Trump's sweeping tariffs.
The cost-cutting plans come after the company missed first-quarter profit estimates due to a 3% decline in global vehicle production, with Magna especially impacted by Tata Motors' Jaguar halting production of I-Pace and E-Pace.
Trump's wavering tariff policies could further roil Magna's financials, as they have forced U.S. auto companies to rethink part sourcing and production output.
"We are actively advancing several initiatives, including operational excellence, restructuring, commercial recoveries, and reduced capital and engineering spending to mitigate the impact of tariffs," said Magna CEO Swamy Kotagiri.
Further details on the cost cuts could be the key focus for investors on the company's conference call with analysts later in the day.
On an adjusted basis, Magna earned 78 cents per share for the quarter through March, compared with analysts' estimates of 90 cents per share according to data compiled by LSEG.
Overall quarterly sales fell about 8.2% to $10.07 billion from a year earlier but outperformed estimates of $9.7 billion.
Its peer Aptiv, however, forecast its second-quarter profit above analysts' estimates on Thursday, betting on benefits from its previously employed cost-saving measures.
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