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April 26, 2017

Lear announces record Q1 results

Lear, the automotive seating and electrical systems supplier, has announced record sales and profits for the first quarter of 2017.

Lear, the automotive seating and electrical systems supplier, has announced record sales and profits for the first quarter of 2017.  Highlights include:

Operating profit of US$431.5m represented a margin of 8.6%, up from 8.3% a year ago on sales up 7% to $5bn.

Net income rose 23% to $305.8m while earnings per share rose 26% to $4.35.

"Our industry-leading cost structure and product capabilities are driving outstanding financial results and market share gains in both product segments," said Matt Simoncini, Lear's president and chief executive officer. "We have a record sales backlog that will provide continued profitable sales growth and superior shareholder returns.

"This year, we celebrate our 100th anniversary, and the company has never been in a stronger competitive position. I have never been more optimistic about our future."

Sales rose due to new business and increased production volumes on key platforms in both product segments.

On 6 February, Lear signed an agreement to acquire Grupo Antolin's seating business which is headquartered in France with operations in five countries in Europe and North Africa. This is comprised of just in time seat assembly, seat structures and mechanisms plus seat covers and, Lear said, "is well positioned among the largest European automakers, including Daimler, Peugeot Citroen, Renault Nissan and Volkswagen.

"Grupo Antolin's seating business has an experienced management team, modern facilities and a reputation for lean manufacturing, superior quality and innovation, including high-functionality and light weight seat designs.  We believe that Grupo Antolin's capabilities are an excellent complement to Lear's existing seating business."

The transaction is expected to close in the second quarter of 2017.

Full year outlook

The supplier's 2017 financial outlook is unchanged and based on industry vehicle production assumptions of 17.6m units in North America, down 1% from the prior year, 22.8m units in Europe and Africa, up 2% from the prior year, and 26.3m units in China, up 2% from the prior year.

Sales are expected to be approximately $19.5bn, and operating profit about $1.6bn.

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