MG reported EPS of $1.49 beating estimates of $1.18, and revenues of $14.34B beating estimates of $13.35B. Sales grew by 11% for the quarter, which was well above the global light vehicle production growth of 3%. Management raised its EBIT margin outlook to 4.7% to 5.1% from 4.1% to 5.1%. Its Adjusted EBIT declined for the quarter, from $507M to $437M. This year-over-year decline is largely a result of higher net production input costs, operating inefficiencies at a facility in Europe, and higher net engineering costs. We feel that these were strong results that beat estimates and included a guidance raise, but it did issue debt for the quarter and was cash flow negative. We continue to like the name but feel that it needs to see some of the near-term headwinds lifted before we become overly excited about its opportunity.
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