Magna International (MG) Q1 2026 earnings summary

Executive summary

• Q1 2026 delivered strong results with 3% sales growth to $10.4 billion and a 58% increase in adjusted EBIT, despite a 7% decline in global light vehicle production.

• Adjusted EBIT margin expanded 190 basis points to 5.4%, and adjusted EPS rose 77% to $1.38 year-over-year.

• Robust cash flow generation with $677 million in operating cash flow and $372 million in free cash flow, both ahead of expectations.

• Portfolio streamlined through margin-accretive divestitures of lighting and rooftop systems businesses, with a $485 million pre-tax loss on assets held for sale.

• Continued recognition for ethical practices, marking the fifth consecutive year on Ethisphere’s list.

Financial highlights

• Q1 sales reached $10.4 billion, up 3% year-over-year; organic sales declined 2%.

• Adjusted EBIT was $558 million, up 58% from last year; adjusted EBIT margin at 5.4%.

• Adjusted net income was $386 million, up from $219 million year-over-year.

• Free cash flow of $372 million, a record for Q1, driven by over $450 million in customer recoveries for EV programs.

• Returned $575 million to shareholders via share repurchases and dividends.

Outlook and guidance

• 2026 outlook reaffirmed for sales ($41.5–$43.1 billion), adjusted EBIT margin (6.0%–6.6%), adjusted EPS ($6.25–$7.25), and free cash flow ($1.6–$1.8 billion).

• Sales outlook slightly lowered due to reduced North American and European production forecasts and divestitures, partially offset by FX benefits.

• Segment EBIT margin guidance: Body Exteriors & Structures and Seating at 8.2–8.8%, Power & Vision at 6.0–6.6%, Complete Vehicles at 2.0–2.6%.

• Expectation for margin expansion and continued strong shareholder returns.

• H1 EBIT expected to be just under 45% of full-year EBIT, with Q2 margins flat year-over-year.