By Lisa Beilfuss
Auto-parts maker Lear Corp. said its profit jumped 21% in the
first quarter, helped by sales in its seating segment that
benefited from a recent acquisition.
Lear, whose customers include U.S. auto companies General Motors
Co. and Ford Motor Co. as well as foreign manufacturers such as
Daimler AG, has benefited from increased auto demand. During the
first quarter, industry sales rose 5.6%, driven in large part by
demand for trucks and sport-utility vehicles--categories that do
well when gas prices are low.
Chief Executive Matt Simoncini said Lear is "well-positioned to
take advantage of major industry trends, such as global platforms,
increasing electrical content, improved fuel efficiency and growing
consumer demand for comfort, convenience and safety features."
Lear said, though, that it expects to report sales for the year
that fall slightly short of analysts' expectations. The company
projected sales of $18 billion to $18.5 billion, representing 1.5%
to 4.3% growth from a year earlier. Analysts are looking for $18.6
billion, according to Thomson Reuters.
The company, based in a suburb of Detroit, said in February that
it is considering splitting into two companies.
Marcato Capital Management LP, which owns 4.7% of Lear, is
pushing for a split that would leave one company focused on
automotive seating and the other on automotive electronics. Marcato
has asserted that a separation would result in a combined value of
$145 a share, which is about 25% above Lear's current level. In
Friday's news release, Lear didn't offer an update on its
review.
In all, Lear booked a profit of $147.3 million, or $1.86 a
share, up from $122 million, or $1.47 a share, a year earlier.
Excluding items, per-share profit rose to $2.28 from $1.84.
Revenue grew 3.7% to $4.5 billion, or 12% excluding foreign
exchange effects.
Analysts anticipated $2.19 in per-share profit and $4.54 billion
in revenue.
In the first quarter, global vehicle production increased 2%
from a year ago. Production was up 8% in China, 3% in Europe &
Africa and 2% in North America. Production fell 15% in South
America, the company said.
Seating segment sales rose 8% to $3.5 billion, reflecting higher
production and the acquisition of car-leather supplier Eagle
Ottawa, a $843 million deal Lear closed in January.
In the electrical segment, sales were down 9% to $1 billion.
Stripping out currency effects, sales rose 2%.
Shares in the company, up 18% this year through Thursday's
close, were inactive premarket.
Write to Lisa Beilfuss at lisa.beilfuss@wsj.com
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