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Magna International Inc. (MG-T), one of the world's biggest auto-parts makers, said Wednesday its quarterly profit jumped 44 percent, beating estimates on the back of strong North American sales and the benefits of cost-cutting done during the recession.
Magna said net income was $322 million US, or $1.30 a share, for the three months to the end of March, up from $224 million, or 99 cents a share, in the same period of 2010.
Analysts on average had forecast Magna would report earnings of $1.13 a share, according to Thomson Reuters I/B/E/S.
Shares in Magna, which competes against such suppliers as Johnson Controls Inc. and TRW Automotive Holding Corp., rose after the results were published.
"They just seem to be performing quite well in North America in particular," said David Tyerman, an analyst at Canaccord Genuity in Toronto. "A lot of that is related to rebounding volume and some of it is related to cost-cutting they did during the downturn."
Aurora, Ontario-based Magna, which makes parts for major auto companies but also assembles complete vehicles in Europe, said vehicle production increased 17 percent in North America and 10 percent in Western Europe in the first quarter.
Complete vehicle assembly sales increased 51 percent to $674 million, while complete vehicle assembly volumes increased 85 percent to about 33,000 units.
Analysts said North American content per vehicle was also up, but the company did not break those numbers out.
"It was a good quarter for us with respect to new business," Chief Executive Donald Walker said on a conference call with analysts.
Magna reported first-quarter sales of $7.2 billion, 34 percent higher than in the year-before quarter and well above the $6.6 billion average estimate of analysts polled by Thomson Reuters.
"Sales were stronger than expected, margins were stronger than expected, North America was the main driver," Tyerman said.
Magna said disruptions to production from the March 11 earthquake and tsunami in Japan had "not been material" to its results nor are they expected to be in future quarters.
Earlier on Wednesday, Magna founder and Chairman Frank Stronach stepped down. He started the company as a one-man tool and die shop in a Toronto garage in 1957.
"I have no regrets, I have a good attitude, I look forward to doing a lot of other things," Stronach said to a standing ovation in his final speech as chairman at the company's annual general meeting on Wednesday.