Magna earnings up, sales down in Q3; warns of China slowdown

Magna International Inc. reported higher earnings despite lower revenue in the third quarter of 2026, as tariff cost recoveries and operational efficiency efforts helped the company offset lower global vehicle volumes.

The Canadian supplier, which keeps its books in U.S. dollars, said adjusted earnings increased 11 per cent to $683 million in the third quarter.

Revenue was $10.1 billion, down four per cent from the same period a year earlier, with lower volumes and the impact of divestitures the primary contributors to the decline.

“We delivered another strong quarter with continued margin expansion, reflecting disciplined execution and progress across a number of areas,” Magna CEO Swamy Kotagiri told analysts on an Oct. 30 conference call.

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Magna expects to largely maintain its margins through the end of 2026, but forecast lower vehicle production volumes in China, pushing it to trim its full-year sales outlook.

It said it expects 2026 revenue of between $41.2 and $42 billion, down from between $41.3 and $42.5 billion previously. It forecast its earnings margin would finish the year at between 6.3 and 6.5 per cent, down from between 6.3 and 6.6 per cent.

In China, Magna estimates production will be 30.4 million vehicles in 2026, about 800,000 less than its previous expectations. The supplier left its forecast for production in North America and Europe unchanged at 15 million and 16.8 million vehicles, respectively.

Kotagiri said results are a bit “lumpy” in China, where Western automakers continue to face steep sales declines. The company estimates overall third-quarter vehicle production in China fell seven per cent, while production at the German automakers operating in the country fell 28 per cent.

While Magna primarily served Western automakers when it entered China, the company has added more domestic China automakers as customers as the local industry advances. China automakers now account for about 65 per cent of the company’s sales in the country, which is an “important” market for Magna, Kotagiri said.

“We have evolved pretty well [in China]. We continue to grow in the long term.”