Linamar shares plummet 14 per cent as earnings fall
The auto parts maker blamed one-time costs for the earnings decline. Meanwhile, its larger rival Magna reported a modest earnings increase from last year
TORONTO—Shares of Linamar Corp. fell nearly 14 per cent in trading Nov. 8 after the company reported a drop in third-quarter earnings compared with a year ago, hurt by one-time costs.
Linamar shares ended the session at $66.24, down more than $10 from the opening bell Wednesday.
The night before the auto parts maker said it earned $107.3 million or $1.62 per diluted share in its third quarter. That compared with a profit of $122.2 million or $1.86 per share a year ago.
However, the company said that before non-recurring items and foreign exchange impacts its earnings increased 9.2 per cent.
Sales for the three months ended Sept. 30 grew to $1.55 billion, up from $1.46 billion in the same quarter last year.
Meanwhile, Linamar’s larger rival, Magna International Inc., reported its financial results before markets opened this morning.
The Aurora, Ont. company said it earned US$503 million in the third-quarter as its sales climbed seven per cent.
Magna, which keeps its books in U.S. dollars, says the profit amounted to US$1.36 per diluted share for the quarter ended Sept. 30. That compared with a profit of $503 million or $1.29 per diluted share a year ago when the company had more shares outstanding.
Sales totalled $9.5 billion, up from $8.85 billion.
The company says the increases came as European light vehicle production grew eight per cent and North American light vehicle production fell seven per cent compared with a year ago.
In its outlook, Magna says it now expects total sales for 2017 to come in at $38.3 billion to $39.5 billion. That compared with an earlier forecast for $37.7 billion to $39.4 billion.
Magna shares are trading down about two per cent in morning trading Nov. 9.