Lear sales plunge, loss posted

SOUTHFIELD—Lear Corp. (NYSE: LEA), the Southfield-based manufacturer of automotive interiors and electronics, reported a net loss of $294 million or $4.89 a share in the second quarter, as sales plunged to $2.44 billion from $5 billion in the second quarter of 2019. In last year’s second quarter, the company posted net income of $183 million or $2.92 a share.

Company officials said Lear’s second quarter financial results were significantly impacted by the COVID-19 pandemic, which resulted in unprecedented extended shutdowns of automotive industry production. Global vehicle production declined by 46 percent compared to a year ago, and, on a Lear sales-weighted basis, global vehicle production was down 55 percent.

“The second quarter of 2020 was one of the most challenging in our history,” said Ray Scott, Lear president and CEO. “Our business was negatively impacted by unprecedented production shutdowns in our major markets in April and May. As restrictions and closures eased, we concentrated our efforts on safely and efficiently restarting operations, managing costs, and positioning the company to take advantage of growth opportunities. Following the resumption of production, we saw weekly improvements in capacity utilization and in our business performance throughout the month of June. We also had another quarter of strong business wins, including additional conquest business in seating. I am so proud of the Lear team for what we have accomplished this quarter, and, while we will continue to face an uncertain operating environment in the near term, I am confident that the Lear team will continue to rise to the challenge.”

Industry disruptions related to the COVID-19 pandemic during the second quarter impacted operations in every major market except for China. North American vehicle production plunged 69 percent, Europe was down 63 percent, while Chinese vehicle production rose 7 percent.

Most of Lear’s operations outside China were closed for all of April and a portion of May. When production resumed, plants came back online gradually, and by the end of the quarter, most plants in major markets were operating at pre-COVID levels.

As the COVID-19 pandemic continues to evolve, there is uncertainty around its ultimate duration and impact. As a result, Lear is not providing 2020 guidance at this time.

To listen to a conference call discussing these results, visit ir.lear.com or call (877) 270-2148 in the United States or (412) 902-6510 elsewhere, using conference ID 7705540.

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