Lear Corp. (NYSE: LEA) reported Q3 EPS of $3.73, $0.59 better than the analyst estimate of $3.14. Revenue for the quarter came in at $4.9 billion versus the consensus estimate of $4.66 billion.

Third Quarter 2020 Highlights

• Sales of $4.9 billion, compared to $4.8 billion in the third quarter of 2019
• Continued to grow sales faster than the market in both segments; E-Systems growth over market of 12 percentage points
• Net income of $174 million and adjusted net income of $225 million, compared to net income of $216 million and adjusted net income of $217 million in the prior year
• Core operating earnings of $327 million, compared to core operating earnings of $338 million in the third quarter of 2019
• Earnings per share of $2.89 and adjusted earnings per share of $3.73, compared to $3.58 and $3.54, respectively, in the third quarter of 2019
• Net cash provided by operating activities of $565 million and free cash flow of $474 million, compared to net cash provided by operating activities of $343 million and free cash flow of $193 million in the third quarter of 2019
• Fully repaid $1.0 billion draw on revolving credit facility
• Cash and cash equivalents at quarter end of $1.25 billion and total liquidity of $3.0 billion

"The steps we took to prepare our plants to safely ramp up production following COVID-19-related shutdowns and position the Company for success resulted in significantly improved third quarter performance," said Ray Scott, Lear's President and Chief Executive Officer. "Despite lower industry volumes versus a year ago, we generated operating margins near pre-COVID levels in both business segments. I am very pleased with how quickly the industry recovered and our business rebounded after the second quarter shutdowns, and, barring any COVID-19-related disruptions or a significant change in industry demand, I am optimistic that our positive momentum will continue for the balance of the year. We will continue to focus on driving operational efficiencies, investing for long-term profitable growth, and delivering superior shareholder returns."

GUIDANCE:

Lear Corp. sees FY2020 revenue of $16.35-16.65 billion, versus the consensus of $16.45 billion.

Industry conditions have stabilized over the last few months, and while there is still uncertainty with respect to the ultimate impact of the COVID-19 pandemic, the Company has decided to reinstitute guidance at this time. Below is Lear's full year 2020 financial outlook, which does not assume any broad COVID-19-related production shutdowns in the fourth quarter of 2020. The industry volume assumptions underlying Lear's 2020 financial outlook are derived from several sources, including internal estimates, customer production schedules, and the most recent IHS production estimates for Lear's vehicle platform

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