Magna International Inc. posted higher profits in its third quarter as it dealt with rising commodity costs but also saw less of a hit from tariffs.
“As we have noted in prior quarters, we continue to experience inflation across several key commodities,” Philip Fracassa, Magna’s chief financial officer, said on the company’s earnings call.
“While this was a headwind in the quarter, we do expect to substantially mitigate or recover these increased costs over time.”
The auto parts maker, which keeps its books in U.S. dollars, says its net income attributable to the company amounted to US$383 million or US$1.44 per diluted share for the quarter ended Sept. 30.
The result compared with a profit of US$305 million or US$1.08 per diluted share in the same quarter last year.
Fracassa said that some input costs have become “incrementally worse” in the third and fourth quarter.
However, he added: “We actually are doing a little bit better on operational excellence, which is helping to mitigate that a little bit. We know when you take a step back, you look across key commodities; steel and aluminum were pretty well covered with resale programs with customers or index pass-throughs.”
The company also appears to be seeing some relief on the tariff front.
“Lower net tariff costs contributed approximately 30 basis points to margins,” Fracassa said on the call.
“Costs were slightly lower and we’re getting recoveries faster than we did last year. While the tariff situation continues to evolve, we currently expect that our full-year net tariff headwind will be similar to what we experienced last year.”
Speaking at the Ontario Auto Forum in May, Magna CEO Swamy Kotagiri said the auto industry can’t make it through heightened economic and geopolitical headwinds without clarity on the issues.
The auto industry has been facing uncertainty from trade tensions with the U.S., competition from Chinese automakers and shifting policies on electric vehicles. Canadian consumers are also watching their wallets and prioritizing value.
Magna’s sales for the quarter totalled US$10.06 billion, down from US$10.46 billion a year earlier. It says the decline reflected lower light vehicle production and the impact of divestitures as it also updated its outlook for 2026.
The company now expects total sales to come in between US$41.2 billion and US$42 billion, edging down from its previous forecast of between US$41.3 billion and US$42.5 billion.
“We lowered our sales expectations to reflect reduced vehicle production in China and unfavourable program mix,” Kotagiri said on the call.
Magna said it generated US$584 million in free cash flow during the quarter and raised its expectations for the full year, “reflecting our year-to-date momentum and confidence in our cash flow trajectory,” said Kotagiri.
The company said in its 2026 outlook that it expects free cash flow to come in between US$1.85 billion and US$1.9 billion, compared with its previous expectation of US$1.75 billion to US$1.85 billion.
On an adjusted basis, Magna says it earned US$1.83 per share in its latest quarter, up from an adjusted profit of US$1.33 per share a year earlier.
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Daniel Johnson, The Canadian Press
This report by The Canadian Press was first published Oct. 30, 2026.
