Lear Corp. (LEA) Misses Q2 EPS by 4c, Revenues In-Line; Offers FY18 Revenue Outlook

Lear Corp. (NYSE: LEA) reported Q2 EPS of $4.95, $0.04 worse than the analyst estimate of $4.99. Revenue for the quarter came in at $5.58 billion versus the consensus estimate of $5.58 billion.

• Record sales of $5.6 billion, up 9% from a year ago
• Record net income of $331 million and record adjusted net income of $330 million, compared to $312 million and $305 million, respectively, in the prior year
• Record core operating earnings of $471 million, up 7% from a year ago
• Record earnings per share of $4.83 and record adjusted earnings per share of $4.95, up 13% from a year ago
• Hired John Absmeier as Chief Technology Officer
• Full year 2018 financial outlook remains unchanged

"In the second quarter, we again delivered record sales and earnings while continuing to invest in product and process capabilities and launching a number of key programs," said Ray Scott, Lear\'s president and chief executive officer. "With industry-leading capabilities in Seating and E-Systems that are aligned with industry trends and the convergence of our two segments, we are well-positioned for future growth. The entire Lear team is focused on delivering operational excellence, strong cash flow and superior returns to our shareholders," Scott concluded.

Full Year 2018 Financial Outlook

• Lear's full year financial outlook is unchanged.
• Sales in 2018 are expected to be in the range of $21.8 billion to $22.0 billion, and core operating earnings are expected to be in the range of $1,790 million to $1,810 million.
• The Company's effective tax rate on an adjusted basis is expected to be approximately 22%, and adjusted net income is expected to be in the range of $1,250 million to $1,270 million.
• Net cash provided by operating activities is estimated to be $1.9 billion, and free cash flow is expected to be more than $1.2 billion.
• Pretax operational restructuring costs are estimated to be $70 million, capital expenditures are expected to be $660 million, and depreciation and amortization expense is estimated to be $500 million.
• Lear's 2018 financial outlook is based on a global industry production assumption of 95.4 million vehicles, up 2% from 2017. On a regional basis, vehicle production is forecasted to be 17.2 million units in North America, up 1%, 23.3 million units in Europe and Africa, up 2%, and 26.9 million units in China, up 2%.
• The financial outlook is also based on an average exchange rate of $1.20/Euro for the year, reflecting an exchange rate of $1.18/Euro for the second half of 2018.

GUIDANCE:

Lear Corp. sees FY2018 revenue of $21.8-22 billion, versus the consensus of $22.15 billion.

For earnings history and earnings-related data on Lear Corp. (LEA) click here.

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