Wachovia Securities has cut Lear Corp. to market perform from outperform after the maker of car seats pre-announced a significant earnings shortfall in the first quarter, Dow Jones reported.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
The broker reportedly told clients that key production platforms remain weak and raw material pressures are not abating. “We believe, the shares have few, if any, catalysts near-term,” Wachovia concluded.
Lear on Tuesday revised its first-quarter 2005 net income guidance from a range of $US0.50 to $0.70 per share to about break-even, primarily reflecting additional industry production cuts, largely in North America.
Lear’s previous first-quarter net income guidance was based on an expected decline in North American production of about 5%, compared with the same period a year ago. Since then, production schedules have continued to decline, with a disproportionate concentration in vehicle platforms where Lear has substantial content.
Additionally, the company is experiencing continuing cost pressures from its supply base.
“While we expect 2005 to be challenging on several fronts, we do expect the industry production environment to improve later in the year following this near-term inventory correction,” said Lear chairman and CEO Bob Rossiter in a statement.
“With our strong sales backlog and a company-wide emphasis on improving our cost structure, our longer-term outlook remains positive.”
