UPDATE 3-Magna posts loss on charges as sales rise


* Q4 loss $1.25/shr vs loss $1.33/shr year ago

* Q4 revenue up 12 pct to $5.42 bln

* Buys Karmann Japan, working on Karmann Germany, Poland

* Cuts '10 rev outlook to $19-20 bln from $19.5-$20.5 bln

* Shares up 14 Canadian cents to C$60.55 on TSX (Recasts, adds details, stock price, analyst comments)

By John McCrank

TORONTO, Feb 25 (Reuters) - Sales at Magna International Inc rose 12 percent in the latest quarter due to a more stable auto market, but the global auto parts supplier said on Thursday that various charges left it in the red.

Magna said it expects global vehicle production to increase this year, led by growth in North America, provided that the economic recovery stays on track.

"Forecast growth in North America vehicle productions would reverse the seven-year slide experienced in this critical vehicle market," Don Walker, Magna's co-chief executive, said in a conference call.

The quarterly loss reflected charges to pay for downsizing operatons, due diligence associated with Magna's cancelled investment in General Motors Corp's Opel and other costs.

"Excluding all these items, the results were more or less in line with expectations," Fadi Chamoun, an analyst at UBS Securities.

For the fourth quarter, Magna posted a loss of $139 million, or $1.25 a share. That was slightly less than a loss of $148 million, or $1.33, a year earlier.

Revenue came in at $5.42 billion, up 12 percent.

The Aurora, Ontario-based company also said it closed a deal to buy up the Japanese unit of its insolvent rival Karmann. It said it is still working to finalize the purchase of Karmann's roof business in Germany and Poland.

Magna, which saw its ambition to become a full-fledged automaker cut short last year when General Motors Corp [GM.UL] reversed a decision to sell it part of Opel, said it has no major acquisitions or divestitures planned for 2010.


Magna is flush with cash, with $1.2 billion net of debt and $1.9 billion in unused credit. It said it is keeping an eye out for any smaller, strategic "bolt-on" opportunities in its core markets or emerging markets, but that it has nothing to report so far.

"I don't see as many small takeover opportunities right now as we saw last year," Walker said.

"A lot of the banks, I presume are supporting some of the smaller suppliers. I still think that we are going to see some consolidation, but we are not looking at a big number of smaller bolt-on acquisitions."

He said the company plans to continue to invest the area of electronics, especially as it is related to hybrid and electric vehicles, and that those investments will impact its 2010 earnings.

Walker said he expects restructuring charges in 2010 to add up to about $15 million $20 million a quarter.

A weaker euro led the company to lower its 2010 revenue forecast to a range of $19 billion to $20 billion, from $19.5 billion to 20.5 billion.

Complete vehicle assembly sales rose 7 percent in the quarter to $512 million.

Magna said the value of its parts in cars in North America fell 1 percent. Content per vehicle in Europe climbed 20 percent.

For the year, the company said sales were down 27 percent from 2008 at $17.4 billion.

Magna's shares were down 1 Canadian cent at C$60.40 on the Toronto Stock Exchange on Thursday afternoon.

($1=$1.07 Canadian) (Additional reporting by Ashutosh Joshi in Bangalore)



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