Q2 FY2026
Filed Jul 31, 2026AlphAI · Earnings readMGA · Q2 2026 · ended June 30, 2026
MAGNA ANNOUNCES STRONG SECOND QUARTER RESULTS; RAISES OUTLOOK FOR 2026
✓Strong quarter
Second-quarter sales increased 3% to $11.0 billion despite a 2% decline in global light vehicle production, while Adjusted EBIT increased 16% to $677 million, Adjusted EBIT margin expanded 70 basis points to 6.2%, Adjusted EPS increased 29% to $1.86, and Free Cash Flow was $617 million. The company raised its 2026 outlook for Adjusted EBIT margin, Adjusted EPS and Free Cash Flow.
Body Exteriors & Structures
$4,421 million
$168 million y/y
EPS · GAAP
$1.72
27% y/y
Full Year 2026 outlook
$41.3 - $42.5 billion
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Reported SalesGAAP | $10,980 million | – | 3% |
| Income from operations before income taxesGAAP | $599 million | – | 21% |
| Net income attributable to Magna International Inc.GAAP | $469 million | – | – |
| Diluted earnings per shareGAAP | $1.72 | – | 27% |
| Adjusted EBITnon-GAAP | $677 million | – | 16% |
| Adjusted EBIT as a percentage of salesnon-GAAP | 6.2% | – | 0.7% |
| Adjusted net income attributable to Magna International Inc.non-GAAP | $508 million | – | – |
| Adjusted EPSnon-GAAP | $1.86 | – | 29% |
| Cash provided from operating activitiesGAAP | $954 million | – | – |
| Free Cash Flownon-GAAP | $617 million | – | – |
| Six-month Reported SalesGAAP | $21,361 million | – | 3% |
| Six-month Income from operations before income taxesGAAP | $686 million | – | 5% |
| Six-month Net income attributable to Magna International Inc.GAAP | $457 million | – | – |
| Six-month Diluted earnings per shareGAAP | $1.65 | – | – |
| Six-month Adjusted EBITnon-GAAP | $1,235 million | – | 32% |
| Six-month Adjusted EBIT as a percentage of salesnon-GAAP | 5.8% | – | 1.3% |
| Six-month Adjusted net income attributable to Magna International Inc.non-GAAP | $894 million | – | – |
| Six-month Adjusted EPSnon-GAAP | $3.24 | – | – |
| Six-month Cash provided from operating activitiesGAAP | $1,631 million | – | – |
| Six-month Free Cash Flownon-GAAP | $989 million | – | – |
| Body Exteriors & Structures Adjusted EBITnon-GAAP | $360 million | – | $13 million |
| Power & Vision Adjusted EBITnon-GAAP | $245 million | – | $83 million |
| Seating Systems Adjusted EBITnon-GAAP | $51 million | – | $9 million |
| Complete Vehicles Adjusted EBITnon-GAAP | $37 million | – | $9 million |
| Corporate and Other Adjusted EBITnon-GAAP | $(16) million | – | $(20) million |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Body Exteriors & StructuresNot separately disclosed in the filing. | $4,421 million | – | $168 million |
| Power & VisionNot separately disclosed in the filing. | $4,093 million | – | $236 million |
| Seating SystemsNot separately disclosed in the filing. | $1,448 million | – | $15 million |
| Complete VehiclesThe filing cited lower engineering revenue, primarily in the Complete Vehicles segment, among factors partially offsetting consolidated sales growth. | $1,160 million | – | $(66) million |
| Corporate and OtherNot separately disclosed in the filing. | $(142) million | – | $(4) million |
Full Year 2026 outlook
- Revenue$41.3 - $42.5 billion
- Tax rateApprox. 23%
- NoteBody Exteriors & Structures Sales: $16.6 - $17.1 billion
- NotePower & Vision Sales: $15.4 - $15.7 billion
- NoteSeating Systems Sales: $5.4 - $5.6 billion
- NoteComplete Vehicles Sales: $4.3 - $4.5 billion
- NoteAdjusted EBIT Margin: 6.3% - 6.6%
- NoteAdjusted EPS: $6.70 - $7.30
- NoteFree Cash Flow: $1.75 - $1.85 billion
- NoteNorth America Light Vehicle Production: 15.0 million units
- NoteEurope Light Vehicle Production: 16.8 million units
- NoteChina Light Vehicle Production: 31.2 million units
- Note1 Canadian dollar equals U.S. $0.713
- Note1 euro equals U.S. $1.153
- NoteCapital Spending: $1.5 - $1.6 billion
- NoteEquity Income (included in EBIT): $190 - $210 million
- NoteInterest Expense, net: Approx. $160 million
- NoteWeighted average diluted shares outstanding: Approx. 270 million
Capital returns
- Paid dividends of $133 million during the three months ended June 30, 2026.
- Repurchased 7.4 million shares for $465 million during the three months ended June 30, 2026.
- Returned $598 million to shareholders during the quarter through dividends and share repurchases.
- Paid dividends of $268 million during the six months ended June 30, 2026.
- Repurchased 15.0 million shares for $905 million during the six months ended June 30, 2026.
- 9.2 million remaining shares were available for repurchase under the current Normal Course Issuer Bid authorization as of June 30, 2026.
- The Board declared a second quarter dividend of $0.495 per Common Share, payable on August 28, 2026 to shareholders of record as of the close of business on August 14, 2026.
What drove it
- Second-quarter sales growth largely reflected launches of new programs during or subsequent to the second quarter of 2025, including complete vehicle programs with value-added contractual arrangements.
- The net strengthening of foreign currencies against the U.S. dollar increased reported U.S. dollar sales by $172 million in the second quarter of 2026.
- Productivity and efficiency improvements, including operational excellence initiatives and prior restructuring actions, supported Adjusted EBIT.
- Adjusted EBIT benefited from net transactional foreign exchange gains in the second quarter of 2026 compared to net transactional foreign exchange losses in the second quarter of 2025.
- Adjusted EBIT benefited from earnings on higher organic sales and recoveries for tariffs, net of costs incurred.
- The six-month Adjusted EBIT result also benefited from higher equity income, including favourable commercial items in Power & Vision, lower warranty costs, and a favourable reported-U.S.-dollar impact from foreign currencies.
- Adjusted EPS benefited from higher Adjusted EBIT and a decrease in average diluted shares outstanding resulting from share repurchases over the past 12 months.
Concerns
- Sales growth was partially offset by end of production of certain programs, lower light vehicle production in North America, Europe and China, lower engineering revenue primarily in Complete Vehicles, and net customer price concessions.
- Second-quarter Adjusted EBIT was partially offset by the net unfavourable impact of commercial items, net unfavourable product mix, and higher commodity costs, partially offset by higher scrap recoveries.
- The company identified light vehicle sales levels, tariffs, production deferrals, cancellations and volume reductions, supply disruptions, commodity prices, skilled-labour costs, customer concentration, EV adoption, execution of critical program launches, operational underperformance, warranty and recall risks, price concessions, and foreign exchange rates as risks to forward-looking expectations.
- Income from operations before income taxes for the six months ended June 30, 2026 was affected by Other expense, net and Amortization of acquired intangible assets totaling $475 million.
What to watch
- Execution against the updated Full Year 2026 Total Sales outlook of $41.3 - $42.5 billion.
- Delivery against the raised Adjusted EBIT Margin outlook of 6.3% - 6.6%.
- Delivery against the raised Adjusted EPS outlook of $6.70 - $7.30 and Free Cash Flow outlook of $1.75 - $1.85 billion.
- The impact of the earlier-than-expected completion of the Lighting and Rooftop Systems divestitures and unfavourable foreign currency translation from a stronger U.S. dollar.
- Production conditions against the company's assumptions of 15.0 million units in North America, 16.8 million units in Europe, and 31.2 million units in China.
- Capital spending of $1.5 - $1.6 billion, equity income of $190 - $210 million, and the ability to continue share repurchases under the current authorization through early November 2026.
Balance sheet and cash flow
- Cash provided from operating activities was $954 million during the three months ended June 30, 2026.
- Free Cash Flow was $617 million during the three months ended June 30, 2026.
- Fixed asset additions were $(269) million during the three months ended June 30, 2026.
- Increase in investment, other assets, and intangible assets was $(77) million during the three months ended June 30, 2026.
- Proceeds from disposition were $9 million during the three months ended June 30, 2026.
- Cash provided from operating activities was $1,631 million during the six months ended June 30, 2026.
- Free Cash Flow was $989 million during the six months ended June 30, 2026, including balance sheet-related customer recoveries for contract adjustments associated with certain electric vehicle programs in North America.
- Fixed asset additions were $(488) million during the six months ended June 30, 2026.
- Increase in investment, other assets, and intangible assets was $(245) million during the six months ended June 30, 2026.
- Proceeds from disposition were $91 million during the six months ended June 30, 2026.
Analysis
Magna reported a strong second quarter ended June 30, 2026. Reported Sales increased 3% to $10,980 million while the company cited a 2% decline in global light vehicle production. New-program launches and $172 million of reported-U.S.-dollar sales benefit from currency strengthening outweighed lower production in North America, Europe and China, program end-of-production effects, lower engineering revenue, customer price concessions, and lower Complete Vehicles sales of $1,160 million.
Management, verbatim
Our strong second-quarter results reflect solid operating performance, disciplined execution, and further progress against our strategic priorities. Supported by record second-quarter adjusted EPS, strong free cash flow, and confidence in our business and global team, we are raising our 2026 outlook. As we look ahead, we remain focused on delivering profitable growth, expanding margins, generating cash, and returning capital to shareholders, while remaining agile in a dynamic global environment.
Swamy Kotagiri, Chief Executive Officer
Not in the filing
stated, not guessed- GAAP gross profit and gross margin
- GAAP operating expenses
- GAAP operating income
- Quarter-end cash balance
- Quarter-end debt balance
- Net debt
- Prior-quarter comparisons for reported metrics
- Segment-specific qualitative drivers for Body Exteriors & Structures, Power & Vision, Seating Systems, and Corporate and Other
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.