Lear Corp.'s (LEA) second-quarter profit dropped 5.6% as the
automotive-seating and electric-systems company reported higher
costs, despite record sales in its electrical power management
systems segment.
The results beat analysts' expectations, and the company raised
its full-year revenue guidance to $15.8 billion from its previous
guidance of $15 billion to $15.5 billion. It now sees core
operating earnings of $750 million to $850 million, up from its
April guidance of $725 million to $775 million.
Lear exited bankruptcy protection in November 2009 after cutting
its debt obligations and shedding thousands of workers. Those deep
cuts have helped the bottom line, but weaker sales in Europe have
contributed to the company's mixed financial performance
recently.
Lear's board agreed in April to further accelerate share
repurchases under the company's existing $1 billion
share-repurchase program and to expand its board, following
pressure from two shareholders. The company said it recently
retired 11.9 million shares.
Lear reported a profit of $137.3 million, or $1.60 a share,
compared with a year-earlier profit of $145.4 million, or $1.45 a
share. Adjusted earnings per share rose to $1.62 from $1.35. Net
sales rose 12% to $4.11 billion.
Analysts surveyed by Thomson Reuters recently expected per-share
earnings of $1.37 on revenue of $3.91 billion.
Gross margin narrowed to 8.2% from 8.6% as cost of sales
increased.
Revenue in North America increased 5.7% to $1.55 billion.
Revenue in Europe and Africa rose 13% to $1.58 billion.
The company said sales in the bigger seating segment rose
10%.
Sales of electrical power management systems increased 20%
driven by additions of new business and higher production.
Shares closed Thursday at $65.96 and were inactive premarket.
The stock is up 89% in the past 12 months.
Write to Billy Crosby at William.Crosby@dowjones.com
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