Magna International (MG) Q2 2026 earnings summary

Executive summary

• Q2 2026 delivered strong results with 3% sales growth to $11.0 billion, 16% increase in adjusted EBIT to $677 million, and a 29% rise in adjusted EPS to a record $1.86, outperforming a 2% decline in global light vehicle production.

• Margin expansion was driven by operational excellence, cost reduction, and disciplined execution, not volume growth.

• Free cash flow reached $617 million, more than double last year, with $954 million in operating cash flow.

• S&P reaffirmed an A- credit rating with a stable outlook; leverage ratio at 1.4x and $1.4 billion cash on hand.

• Over 90% of 2028 business is already booked, supporting long-term growth visibility.

Financial highlights

• Q2 sales were $11.0 billion, up 3% year-over-year; organic sales up 2% excluding FX.

• Adjusted EBIT margin expanded 70 bps to 6.2%; adjusted EBIT was $677 million, up $94 million.

• Adjusted EPS rose 29% to $1.86; share count down 3% due to buybacks.

• Free cash flow of $617 million, more than double last year.

• Interest expense fell by $15 million due to lower debt and strong cash flow.

Outlook and guidance

• Full-year 2026 outlook raised: adjusted EBIT margin now 6.3%-6.6%, adjusted EPS $6.70-$7.30, and free cash flow $1.75-$1.85 billion.

• Sales guidance updated to $41.3-$42.5 billion, reflecting FX headwinds and earlier divestitures.

• Positive growth over market expected at 1%-3% (excluding Complete Vehicles).

• Second half EPS expected to be $3.76, with a 40/60 split between Q3 and Q4.

• Macro assumptions: North America light vehicle production at 15.0 million units, Europe at 16.8 million, China at 31.2 million.