(Photo: courtesy of Magna International)

AURORA, Ont. Auto parts maker Magna International increased its dividend by 16 per cent Friday as it reported a big boost in sales and profit for the fourth quarter and raised its expectations for 2013.

The companys quarterly dividend will increase to 32 cents per share, up from 27.5 cents per share, and the estimate for annual revenue was increased by US$700 million from the previous forecast.

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Magna, which reports its results in U.S. currency, said it now expect sales for the year to be between $32 billion and $33.4 billion, up from a forecast in January of between $31.3 billion and $32.7 billion.

The increase was based on expectations for North American vehicle production to reach 15.8 million and Western Europe to produce 11.9 million, up by 500,000 and 100,000 respectively.

For the fourth quarter, the Ontario-based company, which is one of the largest auto parts makers in the world, said it earned US$351 million or $1.49 per share, up from US$312 million or $1.32 per share in the fourth quarter of 2011.

The company also had a double-digit increase in sales, which rose by nearly 11 per cent to US$8 billion from $7.251.

On an adjusted basis, Magna earned $1.67 per share.

The adjusted earnings were 48 cents per share above the consensus estimate and sales were about $300 million above the consensus.

Magna chief executive Don Walker said the company continued its strong performance in North America.

In Europe, we saw better operating results and a return to profitability. In the rest of the world, Asia remains profitable, despite the significant new facility activity, and we are taking steps to improve results in South America, he said.

Magna has more than 300 factories and 88 product development, engineering and sales centres around the world and more than 100,000 employees.

Shares in the company were up $1.13 or about two per cent at $55.98 in trading on the Toronto Stock Exchange.