Seating, electronics and electrical distribution systems supplier Lear Corporation has reported a full year 2006 net loss of $US707.5m, or $10.31 per share, including the loss on divestiture, restructuring costs and other special items.
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This is, however and improvement on the net loss of $1,381.5m, or $20.57 per share, including special items, in 2005.
The supplier posted record net sales of $17.8bn and a pretax loss of $655.5m, including a loss of $636.0m related to the divestiture of the interior business, restructuring costs of $99.7m and a fourth-quarter loss on the extinguishment of debt of $48.5m.
For 2005, Lear reported net sales of $17.1 billion and a pretax loss of $1,187.2m.
Excluding the loss on divestiture, restructuring costs and other special items, Lear had pretax income of $114.7m in 2006, compared with pretax income before special items of $96.6m in 2005.
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By GlobalDataThe rise in full-year net sales reflected the addition of new business, partially offset by lower production in North America and unfavourable platform mix.
Operating results improved, reflecting the addition of new business and ongoing cost and efficiency actions.
“In a challenging environment last year, we improved our financial results for the full year, improved our liquidity position and took a number of important steps to reposition Lear for future success,” said Bob Rossiter, Lear chairman and chief executive officer. “We refocused our strategy to manage our business on a product-line basis.”
For the fourth quarter of 2006, Lear reported net sales of $4.3bn and a pretax loss of $635.9m, including a loss of $607.3m related to the divestiture of the interior business, restructuring costs of $42.5m and a loss on the extinguishment of debt of $48.5m.
For the fourth quarter of 2005, Lear reported net sales of $4.4 billion and a pretax loss of $346.1m. Excluding the loss on divestiture, restructuring costs and other special items, Lear had pretax income of $63.2m in the fourth quarter of 2006 compared with pretax income before special items of $77.6m in the same period a year earlier.
Lear reported a net loss of $645.0m, or $8.90 per share, including the loss on divestiture, restructuring costs and other special items, for the fourth quarter of 2006, compared with a net loss of $602.6m, or $8.97 per share, including special items, for the fourth quarter of 2005.
During the quarter, the company made progress by reaching an agreement to transfer its North American interior business to the International Automotive Components – North America joint venture with Ford (IAC North America) in return for a 25% equity stake.
Lear expects 2007 worldwide net sales of approximately $15bn and income before interest, other expense, income taxes, restructuring costs and other special items to be in the range of $560 to $600m. Restructuring costs in 2007 are estimated to be about $100m.
Pretax income before restructuring costs and other special items is estimated to be in the range of $270 to $310m. Tax expense is expected to be between $100 and $120m, depending on the mix of earnings by country.
Capital spending in 2007 is estimated at approximately $250m. Depreciation and amortisation expense is estimated at about $310m.
Lear expects vehicle production of approximately 15.3m units in North America and 19.2m units in Europe and continues to see production for the Big Three in North America being down slightly. It is assuming an exchange rate of $1.30/Euro.
