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January 25, 2019

Lear Q4 sales and income dip

Lear Corporation booked Q4 2018 sales of $4.9bn, compared to $5.4bn in Q4 2017. Net income of $212m and adjusted net income of $261m compared to $401m and $300m, respectively, a year ago.

By Olly Wehring

Lear Corporation booked Q4 2018 sales of $4.9bn, compared to $5.4bn in Q4 2017. Net income of $212m and adjusted net income of $261m compared to $401m and $300m, respectively, a year ago.

Core operating earnings of $389m compared to $441m.

Full year 2018 sales of $21.1bn compared to $20.5bn for 2017.

Net income of $1,150m and adjusted net income of $1,205m, compared to $1,313m and $1,178m, respectively, in the prior year.

Core operating earnings of $1,749m, compared to $1,719m for the full year 2017.

"In the fourth quarter, global vehicle production was down 5% compared to last year, with China down 15%.  Despite a more challenging macroeconomic and industry environment, we delivered solid financial results," said Ray Scott, Lear's president and CEO.

"While the industry will continue to face challenges in 2019, we are well positioned with two high-performing business segments that are complementary and aligned with the key trends driving the future of the automotive industry."

During the fourth quarter, Lear repurchased approximately 1.6m shares of common stock for $215m. As of the end of the fourth quarter, it had a remaining share repurchase authorisation of $800m, which expires on 31 December, 2020, and reflects approximately 8% of total market capitalisation at current prices.

The consolidated three-year sales backlog of $3.4bn is the largest in the company's history and will drive continued global revenue growth and sales diversification.

E-Systems represents approximately 30% of the backlog, reflecting market share gains as well as accelerating growth aligned with emerging industry trends, especially vehicle electrification and connectivity.  In addition to the consolidated backlog, Lear has $500m in backlog from non-consolidated joint ventures, primarily in China.

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