New business and favourable currency rates boosted net income at Lear Corporation, the world’s largest automotive interior systems supplier, 11.5% to $116.1 million, or $1.65 per share, on record sales of $US4.3 billion.
This compares to sales of $4.1 billion and net income of $104.1 million, or $1.54 per share, for the second quarter of 2003.
Net sales rose $183 million, or 4%, from the comparable period last year, though the result was partly offset by unfavourable vehicle production mix, the company said in a statement.
Net income per share of $1.65 in the quarter was a 7% improvement compared with a year earlier, reflecting the change in net sales as well as favourable operating performance, partially offset by the impact of new business development expenses and the costs associated with facility ‘actions’. The current year results also benefited from lower interest expenses and a reduced overall tax rate.
During the second quarter, Lear was awarded new seating business with Mazda in North America and continued to expand and grow in China and Korea. The Grote & Hartmann acquisition was completed on July 5, 2004, and integration is in progress.
Third quarter and full year 2004 outlook
In the second half, net sales are expected to benefit primarily from the addition of new business globally and the acquisition of Grote & Hartmann, offset in part by the mix of vehicle production.
For the third quarter of 2004, net sales are expected to be up about 9% from a year ago, to approximately $3.8 billion. Net income per share is expected to be in the range of $1.05 to $1.20.
For the full year, net sales are estimated at $16.8 billion, compared with $15.7 billion in 2003. The full year sales forecast is up $200 million from the prior guidance, reflecting primarily new business wins in Asia and with Asian automakers globally coming on-line this year.
Lear’s 2004 industry production planning assumptions are 16.0 million units for North America and 18.5 million units for Europe (16.1 million for Western Europe).
Net income per share guidance remains unchanged in the $5.85 to $6.25 range.
Full year capital spending is now forecast to be in the high- $300 million range, up from the prior guidance, reflecting spending for near term programmes and strategically important business development initiatives.