Lear Corporation has today (31 October) reported improved financial results for the third quarter with net sales up 23% to US$3.5bn and updated its full year 2011 outlook.
Core operating earnings were US$178m, up 19% from a year ago and were the ninth consecutive quarter of year-over-year earnings improvement.
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In the third quarter, global industry production increased 6% from a year ago, reflecting production increases in most major automotive markets in the world. Production in North America, Europe and China was up 6%, 3% and 10%, respectively.
“Our positive momentum continued in the third quarter as our sales increased at a faster pace than industry production and we achieved our ninth consecutive quarter of improved earnings,” said Lear president and CEO Matt Simoncini.
“We are continuing to invest in strengthening and growing our core businesses with an emphasis on increasing our component capabilities in emerging markets. Our strong financial position allows us to strengthen our competitive position while returning cash to our shareholders.”
In the seating segment, net sales were up 22% to US$2.7bn, primarily driven by the addition of new business, the positive impact of foreign exchange and increased production on key platforms.
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By GlobalDataOperating earnings increased from last year, primarily reflecting the increase in sales and operating performance improvements partially offset by customer pricing and higher launch and commodity costs.
In the Electrical Power Management Systems segment, net sales grew by 26% to US$772.2m, mainly driven by increased production on key platforms, the addition of new business and the positive impact of foreign exchange.
Operating earnings and margins improved from last year, largely reflecting the increase in sales and operating efficiencies, offset in part by customer pricing and higher launch and commodity costs.
During the third quarter, Lear repurchased 2.1m shares of its common stock for a total of US$94m and paid a dividend of US$0.125 per share.
Lear says its 2011 outlook is based on industry vehicle production of 12.9m units in North America, up 2% from the prior outlook, and 18.1m units in Europe, up 1%.
Lear expects 2011 net sales in the range of US$13.8bn to US$14.1bn, mainly reflecting higher industry production.
The 2011 outlook for pre-tax operational restructuring costs of US$100m, depreciation and amortisation of US$260m and capital spending of US$325m remain unchanged from the prior outlook.
Free cash flow for 2011 is expected to be around US$435m, up US$10m, primarily reflecting the increased earnings.
