The auto parts maker said Friday that vehicle production was significantly lower than anticipated largely due to the chip shortages which drove unpredictable customer production schedules, resulting in labour and other inefficiencies at its factories.
It also said its results were hurt by higher production costs, including freight and commodity costs, as well as a provision on engineering service contracts with the automotive unit of Evergrande.
Magna, which keeps its books in U.S. dollars, says it earned US$11 million or four cents per diluted share for the quarter ended Sept. 30 compared with a profit of US$405 million or US$1.35 per diluted share in the same quarter last year.
Sales fell to US$7.92 billion compared with US$9.13 billion a year ago.
On an adjusted basis, Magna says it earned 56 cents per diluted share in its most recent quarter, down from US$1.95 per diluted share a year ago. Analysts on average had expected an adjusted profit of 60 cents per share and US$7.89 billion in revenue, according to financial markets data firm Refinitiv.
In its outlook, the company said it expected to earn US$1.35 billion to US$1.45 billion in net income for the full year, down from earlier guidance for a profit between US$2.0 billion and US$2.2 billion.
Total sales are expected between US$35.4 billion and US$36.4 billion, down from earlier guidance for between US$38 billion and US$39.5 billion.
The outlook was based on light vehicle production of 13.4 million in North America, 16.5 million in Europe and 23.0 million in China, down from earlier expectations for 14.4 million vehicles in North America, 18.1 million in Europe and 24.7 million in China.
The company also announced that chief financial officer Vincent Galifi has been appointed president, effective Jan. 1.
Patrick McCann, senior vice-president, finance, has been appointed chief financial officer, effective Jan. 1, while Anton Mayer, executive vice-president, research and development, will become executive vice-president and chief technology officer.