Lear Fourth Quarter Sales, Profits Jump

SOUTHFIELD — The Southfield-based automotive seating and electrical parts supplier Lear Corp. (NYSE: LEA) reported net income of $261.6 million or $3.24 a share uin the fourth quarter, up sharply from $72.8 million or 88 cents a share in the fourth quarter of 2013. Revenue was $4.55 billion, up from $4.26 billion a year earlier.

For the full year, net income was $672.4 million or $8.23 a share, up from $431.4 million or $4.99 a share in 2013. Revenue was $17.73 billion, up from $16.23 billion in 2013.

“2014 marked our fifth consecutive year of higher sales, earnings per share and strong free cash flow,” said Lear president and CEO Matt Simoncini. “Sales grew faster than industry production, and we improved our margins in both business segments on a year-over-year basis. Our improving financial results and our strong sales backlog demonstrate that our focused strategy is delivering value for our customers and for our shareholders. The investments that we have made in expanding our electrical business, increasing our component capabilities and improving our low-cost manufacturing and engineering footprint in both business segments, as well as the acquisitions of Eagle Ottawa and Guilford, have positioned Lear to take advantage of industry growth and major industry trends.”

In the fourth quarter, global vehicle production increased 1 percent from a year ago, primarily reflecting growth in China and North America. Production was up 7 percent in China and up 4 percent in North America. Production was flat in Europe and Africa, and down 12 percent in South America.

For the full year, global vehicle production increased 3 percent from a year ago to a record 85.6 million vehicles. Production in China, North America, and Europe and Africa increased by 9 percent, 5 percent and 3 percent, respectively. Production in South America was down 17 percent.

In the fourth quarter, sales in the seating segment were up 10 percent to $3.5 billion, reflecting higher production on key platforms and the addition of new business, partially offset by the impact of foreign exchange. Adjusted segment earnings were $203 million, up 30 percent from last year, primarily reflecting the increase in sales and favorable operating performance.

In the electrical segment, sales were down 1 percent to $1.1 billion. Excluding the impact of foreign exchange, sales were up 4 percent, primarily reflecting the addition of new business. The electrical segment continues to report strong earnings growth, driven by an industry leading cost structure and strong operating performance. Adjusted segment earnings were $146 million, up 18 percent from last year, reflecting favorable operating performance.

In the fourth quarter of 2014, free cash flow was $372 million, and net cash provided by operating activities was $516 million.

For the full year, in the seating segment, sales were up 11 percent to $13.3 billion, reflecting primarily higher production on key platforms and the addition of new business. Adjusted segment earnings were $752 million, up 15 percent from last year, primarily reflecting the increase in sales and favorable operating performance.

In the electrical segment, full year sales were up 5 percent to $4.4 billion, driven primarily by the addition of new business. Adjusted segment earnings were $567 million, up 33 percent from last year, reflecting operating efficiencies, as well as the increase in sales.

Free cash flow in 2014 was $503 million, and net cash provided by operating activities was $928 million.

During the fourth quarter4, Lear repurchased 1.6 million shares of its common stock for a total of $152 million. As of the end of the fourth quarter, Lear has a remaining share repurchase authorization of $339 million, which expires in April 2016 and reflects about 4 percent of Lear’s total market capitalization at current market prices.

Since initiating the share repurchase program in early 2011, Lear has repurchased 30.9 million shares of its common stock for a total of $1.9 billion at an average price of $61.97 a share. This represents a reduction of approximately 29 percent of shares outstanding at the time Lear began the program.

On Jan. 5, Lear completed its acquisition of Eagle Ottawa, the world’s leading supplier of premium automotive leather. Based on this acquisition, Lear said it expects 2015 sales of $18.5 billion to $19 billion, and core operating earnings are expected to be in the range of $1.175 billion to $1.225 billion.

To listen to a replay of a conference call discussing these results, call (855) 859-2056 in the United States or (404) 537-3406 elsewhere, using conference ID 62876068, or visit the investor relations section of www.lear.com.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.