Magna International Inc. is lowering spending and working to pass on higher costs stemming from tariffs as the company continues to face uncertainties from global trade disruptions.
"We continue to work closely with our customers to mitigate the impact of tariffs," chief executive Swamy Kotagiri told analysts during the company's second-quarter earnings call.
Kotagiri said the company has settled almost all of its 2025 net tariff exposure with the major automakers, meaning it will continue to pass on costs to its customers.
The company lowered its estimated annualized tariff-related cost projections for the year to $200 million, from its previous estimate of $250 million.
It's also continuing to increase its compliance with the Canada-U.S.-Mexico Agreement, the CEO said.
As earnings reports roll in, it's putting the impact of tariffs on the auto industry on display.
General Motors Inc. reported its profit declined 35 per cent in its second quarter as it took a US$1.1 billion hit from tariffs. The automaker is expecting its net tariff costs to be higher in the next quarter.
Meanwhile, Stellantis raised its annualized estimates for tariff costs earlier this week, now expected to be closer to 1.5 billion euros.
Magna's net income for the three months ending June 30 was US$379 million, or $1.35 per diluted share, up from US$313 million or $1.09 per share in the same quarter last year.
Earnings worked out to $1.44 per adjusted diluted share, up from $1.35 per share in the same quarter last year. The mean analyst estimate had been for earnings of $1.14 per share, according to LSEG Data & Analytics.
Kotagiri said the company raised its outlook for the year despite lower vehicle production, crediting cost-saving efforts over the past months.
The revised outlook shows a dip in overall North American vehicle production but increased output in China, while it boosted its sales outlook by US$400 million to upwards of US$42 billion.
Magna reported its sales totalled US$10.63 billion in the quarter, down from US$10.96 billion in the same quarter last year, as light vehicle production was down six per cent in North America and two per cent in Europe and the company ended production of some programs.
This report by The Canadian Press was first published Aug. 1, 2025.
Companies in this story: (TSX: MG)
Ritika Dubey, The Canadian Press
