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UPDATE 3-Magna revenue forecast shines, sees auto industry overcoming chip crunch by year-end

(Adds CFO and analyst comment, details on margin, share movement)

Feb 19 (Reuters) - Canadian auto parts maker Magna International Inc forecast full-year revenue above estimates on Friday and signalled it could make up for any production shortfall due to a global chip supply crunch by the end of 2021, lifting its U.S.-listed shares as much as 10%.

Pent-up demand and customers preferring to buy vehicles seeking more safety during the COVID-19 health crisis have lifted auto sales and boosted demand for auto suppliers but the automotive chip shortage is forcing carmakers to trim production.

“With respect to the semiconductor shortage, we see near-term disruptions to OEM production. However, at this point, any shortage is expected to be made up by the end of 2021,” Chief Financial Officer Vincent Galifi said on a post-earnings call with investors.

Magna expects 2021 revenue of $40 billion to $41.6 billion, above analysts’ average estimate of $38.41 billion, according to Refinitiv I/B/E/S data.

The Ontario-based company estimates light-vehicle production of 15.9 million units for 2021 in North America. In Europe, it expects full-year production to be 18.5 million units and 24 million units in China, all above 2020 levels but below pre-pandemic levels of 2019.

“The center of the result was robust margin,” Credit Suisse analyst Dan Levy said. Adjusted EBIT margin was 10.4% in the fourth quarter, compared with 6.3% last year.

Levy said Magna’s results would not only help the auto supplier’s momentum but also set the tenure of new Chief Executive Officer Swamy Kotagiri on a strong footing.

Net income attributable to Magna surged 67% to $738 million, while adjusted earnings per share of $2.83 beat estimates of $2.02.

Revenue rose 12.4% to $10.57 billion, also beating estimates of $10.02 billion.

The company raised its quarterly cash dividend by 8% to 43 cents per share. (Reporting by Shreyasee Raj in Bengaluru; Editing by Sriraj Kalluvila and Maju Samuel)

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