Interior systems supplier Lear Corporation has reported net income of $123 million ($1.70 per share) for the fourth quarter of 2004 compared with $132.4 million ($1.81 a share) a year ago despite achieving record net sales of $4.29 billion during the period.
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The year on year increase in net sales during the quarter “reflects the addition of new business globally and the benefit of currency exchange, offset by lower industry production and unfavorable vehicle platform mix”, Lear said in a statement.
The decline in fourth quarter net income was due primarily to the mix of sales and the impact of higher raw material prices.
“Challenging industry conditions in both of our major markets had an adverse impact on our fourth quarter financial results,” said Lear chairman and CEO Bob Rossiter. “Our longer-term outlook, however, remains positive, supported by our $3.8 billion three-year sales backlog, solid financial position and strong operating fundamentals.”
For full year 2004, Lear reported record sales of $17.0 billion and net income of $422.2 million, or $5.77 per share, including a $0.20 income tax benefit primarily related to the settlement of prior years’ tax matters.
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By GlobalDataThese results compared well with full year 2003 net sales of $15.7 billion and net income of $380.5 million, or $5.31 per share.
For the first quarter of 2005, Lear expects net sales to be in the range of $4.3 to $4.5 billion, compared with $4.5 billion for the first quarter of 2004, primarily reflecting reduced vehicle production in the US, offset partly by the addition of new business globally.
Net income is expected to be in the range of $0.50 to $0.70 per share, compared with $1.24 for the first quarter of 2004. The expected decline in net income per share from a year ago primarily reflects the impact of higher raw material prices, as well as reduced US vehicle production.
For the full year, Lear is assuming vehicle production of 15.7 to 16.0 million units for North America and 18.3 to 18.6 million units for Europe. Net sales are expected to be $17.6 to $18.0 billion, compared with $17.0 billion for 2004. This increase primarily reflects the addition of new business globally. Net income is expected to be in the range of $5.00 to $6.00 per share.
Full year capital spending is estimated to be in the range of $425 to $475 million.
