SOUTHFIELD — Lear Corp. (NYSE: LEA), the Southfield manufacturer of automotive seating and electric systems, posted net income of $235.3 million or $3.07 a share in the fourth quarter, down from $261.8 million or $3.24 a share in the same quarter a year earlier.
Revenue was $4.72 billion, up from $4.55 billion a year earlier.
The cut in fourth quarter net income stemmed from higher cost of sales, higher selling, general and administrative expenses, and a sharply higher tax rate.
For the full year, Lear reported net income of $745.5 million or $9.59 a share, up from $672.4 million or $8.23 in 2014. Revenue was $18.21 billion, up from $17.73 billion a year earlier.
Lear also reported “adjusted earnings per share” of $3.20 a share in the fourth quarter, up 41 percent from earnings by the same yardstick a year earlier. Adjusted earnings exlcudes restructuring costs, losses on the extinguishment of debt, losses related to affiliates and related tax impacts.
“In the fourth quarter, we again delivered record financial results, and for the full year 2015 we reported our sixth consecutive year of higher sales, increased earnings per share and strong cash flow,” Lear president and CEO Matt Simoncini said in a press release. “During 2015, we continued to invest in our business with the acquisitions of Eagle Ottawa, Arada Systems and Autonet Mobile as well as continued expansion of our world-class component facilities in low-cost regions. As a result of these investments, Lear has differentiated itself from the competition in craftsmanship and connectivity. Our strong financial position, product capabilities, low-cost manufacturing footprint and strong customer relationships have put Lear in the best overall competitive position in our history.”
In the fourth quarter, Lear said seating sales were up 7 percent to $3.7 billion, while electrical segment sales were down 5 percent to $1 billion, due to the effects of the strong U.S. dollar. For the full year seating sales were up 6 percent to $14.1 billion, while electrical segment sales fell 7 percnet to $4.1 billion, again to foreign currency exchange.
In the fourth quarter, sales in North America were $1.97 billion, up from $1.75 billion a year earlier. Sales in Europe and Africa were $1.73 billion, down from $1.77 billion a year earlier. Sales in Asia were $921 million, up from $839 million a year earlier. Sales in South America were $104 million, down from $189 million a year earlier.
During the fourth quarter of 2015, Lear repurchased approximately 841,000 shares of its common stock for a total of $104 million. As of the end of the fourth quarter, Lear has a remaining share repurchase authorization of $513 million, which expires Dec. 31, 2017, and reflects approximately 7 percent of Lear’s total market capitalization at current market prices.
Since initiating the share repurchase program in early 2011, Lear has repurchased 35.2 million shares of its common stock for a total of $2.4 billion at an average price of $68.12 per share. This represents a reduction of approximately 34 percent shares outstanding at the time Lear began the program.
Lear’s 2016 financial outlook was unchanged from a quarter earlier, based on industry vehicle production assumptions of 18.2 million units in North America, up 4 percent from the prior year, 21.8 million units in Europe and Africa, up 2 percent from the prior year, and 23.6 million units in China, up 6 percent from the prior year. Lear’s financial guidance is based on an average full year exchange rate of $1.10/Euro, down 1% from 2015.
Sales in 2016 are expected to be in the range of $18.5 billion to $19 billion, and core operating earnings are expected to be in the range of $1.35 billion to $1.4 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 the conference ID 61724143. The recording will be available through Feb. 5.
Lear serves every major automaker in the world, and Lear content can be found on more than 350 vehicle nameplates. The company has 136,000 employees in 36 countries. More at www.lear.com.