Lear has reported profits up for the first quarter of 2007. Lear reported net income of $49.9 million, or $0.64 per share, including restructuring costs and other special items, for the first quarter of 2007. This compares with net income of $17.9 million, or $0.26 per share, including restructuring costs and other special items, for the first quarter of 2006.
For the first quarter of 2007, Lear reported net sales of $4.4 billion and pretax income of $82.3 million, including restructuring costs of $15.8 million and other special items totaling $10.7 million.
For the first quarter of 2006, Lear reported net sales of $4.7 billion and pretax income of $14.8 million. Excluding restructuring costs and other special items, Lear would have had pretax income of $108.8 million in the first quarter of 2007. This compares with pretax income before restructuring costs and other special items of $15.5 million in the same period a year earlier.
“I want to thank the Lear team for all of their hard work in delivering improved financial results during these challenging times, while continuing to maintain a strong focus on supporting our customers,” said Bob Rossiter, Lear Chairman and Chief Executive Officer. “Now that we have completed the divestiture of the Interior business, our full attention is on strengthening our core seating, electronics and electrical distribution businesses.”
The decline in net sales for the quarter reflects primarily lower production in North America and the divestiture of Lear’s European Interior business, offset in part by new business mainly outside of North America and favourable foreign exchange. Operating improvement reflects favourable cost performance and the benefit of new business, offset in part by lower production in North America.
The improvement in Lear’s core businesses in the first quarter was driven by solid performance in the seating segment. The year-over-year improvement in seating primarily reflects favourable cost performance and the impact of new business mainly outside of North America. In the electronics and electrical distribution segment, results were below year-ago levels but improved sequentially over the fourth quarter of 2006. Compared with a year ago, the major adverse factor impacting this segment is lower production on key platforms in North America.
Lear said that it anticipates 2007 income before interest, other expense, income taxes, restructuring costs and other special items (core operating earnings) to be in the range of $580 to $620 million, an improvement of $20 million from the prior forecast. The revised full-year outlook reflects more favorable production volumes and improved cost performance in international operations.
Key assumptions underlying Lear’s financial outlook include expectations for industry vehicle production of approximately 15.2 million units in North America and 19.3 million units in Europe. Lear continues to see production for the Big Three in North America being down slightly, as compared with 2006.