Lear reports record second quarter 2018 results Redacción AMI

Lear Corporation, a leading global supplier of automotive seating and electrical systems, reported record second quarter 2018 sales and earnings.  Highlights include:

• Record sales of $5.6 billion, up 9% from a year ago
• Record net income of $331 million and record adjusted net income of $330 million, compared to $312 million and $305 million, respectively, in the prior year
• Record core operating earnings of $471 million, up 7% from a year ago
• Record earnings per share of $4.83 and record adjusted earnings per share of $4.95, up 13% from a year ago
• Hired John Absmeier as Chief Technology Officer
• Full year 2018 financial outlook remains unchanged

“In the second quarter, we again delivered record sales and earnings while continuing to invest in product and process capabilities and launching a number of key programs,” said Ray Scott, Lear’s president and chief executive officer.  “With industry-leading capabilities in Seating and E-Systems that are aligned with industry trends and the convergence of our two segments, we are well-positioned for future growth.  The entire Lear team is focused on delivering operational excellence, strong cash flow and superior returns to our shareholders,” Scott concluded.

In the second quarter of 2018, sales were $5.6 billion, an increase of 9% year-over-year.  Excluding the impact of foreign exchange, sales were up 5%.  This increase reflects the addition of new business in both product segments, the sales impact of obtaining control of certain affiliates and the impact of the acquisition of Grupo Antolin’s seating business, partially offset by lower production volumes on key Lear platforms.  Sales for our Seating and E-Systems segments were up 6% and 19%, respectively.  Excluding the impact of foreign exchange, sales for our Seating and E-Systems segments were up 2% and 13%, respectively.

Core operating earnings increased $32 million to $471 million, or 8.4% of sales, primarily reflecting the increase in sales.  In the Seating segment, margins and adjusted margins were 8.1% and 8.3% of sales, respectively.  In the E-Systems segment, margins and adjusted margins were 13.4% and 14.0% of sales, respectively.

Earnings per share were $4.83.  Adjusted earnings per share were up 13% to $4.95 per share, reflecting improved operating earnings, a lower tax rate and a reduced share count.

Net cash provided by operating activities was $517 million, and free cash flow (1) was $348 million.

Share Repurchase Program

During the second quarter of 2018, we repurchased approximately 718,000 shares of our common stock for a total of $140 million. As of the end of the second quarter, we had a remaining share repurchase authorization of $1.2 billion, which reflects approximately 10% of our total market capitalization at current market prices.

Since initiating the share repurchase program in early 2011, we have repurchased 45.6 million shares of our common stock for a total of $3.8 billion at an average price of $83.50 per share.  This represents a reduction of approximately 43% of our shares outstanding at the time that we began the program.

John Absmeier Hired As Chief Technology Officer

On June 18, 2018, John Absmeier joined Lear as Chief Technology Officer.  Most recently, John was Senior Vice President and General Manager of the ADAS/Autonomous business unit at Harman International and Vice President of Smart Machines at Samsung Electronics, where he led the acquisition of Harman by Samsung.

John joined Samsung in 2015 from Delphi, where he held various senior level positions during a 19-year career including founder and Managing Director of Delphi Labs @ Silicon Valley and Autonomous Driving as well as Business Director for Electronic Controls and Electrification in Asia-Pacific for six years.  He also held several roles of increasing responsibility at Delphi in the areas of hybrid and electric vehicles, fuel cells and telematics.

Full Year 2018 Financial Outlook

Lear’s full year financial outlook is unchanged.

Sales in 2018 are expected to be in the range of $21.8 billion to $22.0 billion, and core operating earnings are expected to be in the range of $1,790 million to $1,810 million.

The Company’s effective tax rate on an adjusted basis is expected to be approximately 22%, and adjusted net income is expected to be in the range of $1,250 million to $1,270 million.

Net cash provided by operating activities is estimated to be $1.9 billion, and free cash flow is expected to be more than $1.2 billion.

Pretax operational restructuring costs are estimated to be $70 million, capital expenditures are expected to be $660 million, and depreciation and amortization expense is estimated to be $500 million.

Lear’s 2018 financial outlook is based on a global industry production assumption of 95.4 million vehicles, up 2% from 2017.  On a regional basis, vehicle production is forecasted to be 17.2 million units in North America, up 1%, 23.3 million units in Europe and Africa, up 2%, and 26.9 million units in China, up 2%.

The financial outlook is also based on an average exchange rate of $1.20/Euro for the year, reflecting an exchange rate of $1.18/Euro for the second half of 2018.

Certain of the forward-looking financial measures above are provided on a non-GAAP basis. The Company does not provide a reconciliation of such forward-looking measures to the most directly comparable financial measures calculated and presented in accordance with accounting principles generally accepted in the United States (“GAAP”) because to do so would be potentially misleading and not practical given the difficulty of projecting event driven transactional and other non-core operating items in any future period. The magnitude of these items, however, may be significant.

La entrada Lear reports record second quarter 2018 results se publicó primero en Revista Auto Motores Informa.

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