Seat and electrical systems supplier Lear Corporation said fourth quarter (Q4) sales were down 2% year on year to $4.6bn, down 2% from a year ago. Net income of $230m and adjusted net income of $270m compared with $235m and $245m in 2015. Operating earnings rose 7% to a record $386m with margin of 8.3%, up from 7.6% a year earlier, also a record.
Full year 2016 sales were also a record – $18.6bn, up 2%. Net income of $975m and adjusted net income of $1.026bn were also up versus $746m and $844m. Full year operating earnings rose 17% to a record $1.535bn and margin of 8.3%, up from 7.2% a year ago, also set a record.
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"We just completed our most successful year ever, as the investments that we have made in our business are paying off. We achieved record performance in all key financial metrics, continued to improve our cost structure and strengthened our product capabilities," said Matt Simoncini, Lear's president and CEO.
"I believe that we are in the strongest overall competitive position in our history. We have a record sales backlog and are uniquely positioned to continue to deliver profitable growth."
However, Q4 seating segment sales were down 2% to $3.6bn. Earnings were $287m or 8% of sales. Adjusted segment earnings were $297m (8.2%) of sales. Adjusted margins improved 60 basis points from a year ago, reflecting favourable operating performance.
In the [electrical] E-Systems segment, sales were flat at $1.0bn. Earnings were $150m or 14.4% of sales. Adjusted earnings were $154m (14.8%). Adjusted margins improved 70 basis points from a year ago, reflecting the increase in sales and favorable operating performance.
Full year seating sales were up 2% to $14.4bn with earnings of $1,136m or 7.9% of sales. Adjusted segment earnings were $1,175m (8.2%). Margins increased 110 points.
E-Systems sales were up 2% to $4.2bn in 2016 thanks to new business and higher production volumes on key platforms. Earnings were $591m or 14.1% of sales. Adjusted earnings were $619m (14.7%). Margins improved 90 points.
Lear's 2017 outlook assumes industry vehicle production of 17.6m units in North America, down 2% on 2016, 22.6m units in Europe and Africa, (1%) and 26.3m in China (3%).
Sales in 2017 are expected to be approximately $19.5bn, and operating earnings about $1.6bn.
