Lear (LEA) reported $5.56 billion in revenue for the quarter ended March 2025, representing a year-over-year decline of 7.2%. EPS of $3.12 for the same period compares to $3.18 a year ago.The reported revenue represents a surprise of +0.09% over the Zacks Consensus Estimate of $5.56 billion. With the consensus EPS estimate being $2.64, the EPS surprise was +18.18%.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street expectati ...

Lear (LEA) Q1 2025 Earnings Call May 06, 2025 09:00 AM ET Speaker0 Good morning, everyone, and welcome to the Lear Corporation First Quarter twenty twenty five Earnings Conference Call. All participants will be in a listen only mode. After today's presentation, there will be an opportunity to ask questions. Please also note today's event is being recorded. I would now like to turn the conference call over to Tim Brumbaugh, Vice President, Investor Relations. Please go ahead. Speaker1 Thanks, Jamie. Good mor ...

May 6, 2025 First Quarter 2025 Financial Results Ray Scott, President and CEO Jason Cardew, Senior Vice President and CFO Lear Proprietary: The information contained herein is the property of Lear Corporation. Safe Harbor Statement Forward-Looking Statements This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding anticipated financial results and liquidity. The words "will," "may," "designed to," "outloo ...

Financial Performance - Revenue for Q1 2025 was $5.6 billion, a decrease of 7% compared to $6.0 billion in Q1 2024[4] - Net income for Q1 2025 was $81 million, down from $110 million in Q1 2024, with adjusted net income at $169 million compared to $183 million[4] - Core operating earnings were $270 million, representing 4.9% of sales, compared to $280 million or 4.7% of sales in Q1 2024[6] - Earnings per share were $1.49, down from $1.90 in Q1 2024, while adjusted earnings per share were $3.12 compared to $3.18[10] - Total net sales for Q1 2025 were $5,560.3 million, a decrease of 7.2% compared to $5,994.6 million in Q1 2024[29] - North America net sales decreased to $2,248.8 million from $2,475.9 million, representing a decline of 9.2%[29] - Seating segment net sales were $4,151.1 million, down from $4,477.6 million, a decrease of 7.3%[33] - E-Systems segment net sales decreased to $1,409.2 million from $1,517.0 million, a decline of 7.1%[33] Cash Flow and Operating Activities - Net cash used in operating activities was $(128) million, and free cash flow was $(232) million, compared to $(35) million and $(148) million in Q1 2024[10] - Free cash flow for Q1 2025 was $(231.7) million, compared to $(148.2) million in Q1 2024, indicating a worsening cash flow situation[29] Business Operations and Market Conditions - Operating margins increased year-over-year for both Seating and E-Systems segments, with approximately 125 basis points in Seating and approximately 155 basis points in E-Systems[4] - Awarded business in E-Systems totaling over $750 million in average annual sales[4] - Global vehicle production was up 1% year-over-year, with North America down 5%, Europe down 7%, and China up 12%[6] Shareholder Actions - Lear repurchased $25 million of shares during Q1 2025, with a remaining share repurchase authorization of approximately $1.1 billion[11] Financial Outlook - The company did not reaffirm its 2025 financial outlook due to uncertainty in industry production caused by evolving tariff environments[13] Assets and Liabilities - Total assets increased to $14,623.3 million in Q1 2025 from $14,027.5 million in Q4 2024, an increase of 4.3%[27] - Total liabilities and equity also rose to $14,623.3 million in Q1 2025 from $14,027.5 million in Q4 2024, reflecting a 4.3% increase[27] Adjusted Financial Metrics - Adjusted net income for Q1 2025 was $169.3 million, compared to $183.2 million in Q1 2024, a decline of 7.9%[31] - Diluted net income per share available to Lear decreased to $1.49 from $1.90, a drop of 21.6% year-over-year[31] - Core operating earnings for Q1 2025 were $270.4 million, down from $279.8 million in Q1 2024, reflecting a decrease of 5.0%[29]

Core Insights - Lear Corporation reported a solid start to 2025 with improved operational margins in both Seating and E-Systems segments despite lower industry production in key markets [3][4] - The company is facing challenges due to changes in global tariffs, which have created uncertainty in the automotive industry and impacted the cost structure of the supply chain [3][4] - Lear is focused on maintaining long-term competitiveness by managing near-term challenges, winning new business, and investing in automation and restructuring [3][4] Financial Performance - Total sales for Q1 2025 were $5,560.3 million, a decrease of 7% from $5,994.6 million in Q1 2024 [4][5] - Net income for Q1 2025 was $80.7 million, down from $109.6 million in the same period last year [4][5] - Adjusted net income was $169.3 million compared to $183.2 million in Q1 2024, with adjusted earnings per share at $3.12, down from $3.18 [4][5][8] Segment Performance - In the Seating segment, net sales were $4,151.1 million with segment margins of 5.2% and adjusted margins of 6.7% [34][35] - The E-Systems segment reported net sales of $1,409.2 million, with segment margins of 3.9% and adjusted margins of 5.2% [34][35] - Both segments experienced year-over-year margin improvements driven by efficiency gains and restructuring efforts [5][8] Cash Flow and Share Repurchase - Net cash used in operating activities was $(128) million, and free cash flow was $(232) million, compared to $(35) million and $(148) million in Q1 2024, respectively [5][9] - The company repurchased $25 million of shares during the quarter and had a remaining share repurchase authorization of approximately $1.1 billion [11][12] Market Outlook - Due to the uncertainty in industry production caused by evolving tariff environments, Lear is not reaffirming its 2025 financial outlook at this time [13] - The company remains confident in delivering its operating performance commitments as highlighted in previous earnings calls [13]

Company Overview - Lear (LEA) is expected to report earnings for the quarter ended March 2025, with a consensus estimate of $2.61 per share, reflecting a year-over-year decline of 17.9% [3] - Revenues are anticipated to be $5.56 billion, down 7.3% from the same quarter last year [3] Earnings Expectations - The earnings report is scheduled for release on May 6, 2025, and could influence stock movement based on whether actual results exceed or fall short of expectations [2] - The consensus EPS estimate has been revised 5.6% lower in the last 30 days, indicating a reassessment by analysts [4] Earnings Surprise Prediction - The Zacks Earnings ESP for Lear is +0.75%, suggesting a potential positive deviation from the consensus estimate [10][11] - However, Lear currently holds a Zacks Rank of 4 (Sell), complicating the prediction of an earnings beat [11] Historical Performance - In the last reported quarter, Lear exceeded the expected EPS of $2.59 by delivering $2.94, resulting in a surprise of +13.51% [12] - Over the past four quarters, Lear has beaten consensus EPS estimates consistently [13] Industry Context - In the Zacks Automotive - Original Equipment industry, Magna (MGA) is also expected to report earnings of $0.90 per share, down 16.7% year-over-year, with revenues projected at $9.53 billion, a decrease of 13.2% [17] - Magna's consensus EPS estimate has been revised 3.9% lower, but it has a higher Most Accurate Estimate leading to an Earnings ESP of 6.70% [18]

Group 1 - The article discusses the author's long position in shares of MGA, LEA, and ALV, indicating a positive outlook on these companies [1] - It emphasizes the importance of conducting due diligence and research before making any investment decisions, particularly in high-risk trading styles [2] - The article clarifies that past performance does not guarantee future results, and opinions expressed may not reflect the views of Seeking Alpha as a whole [3]

Group 1 - Lear Corporation will participate in a virtual fireside chat on March 18, 2025, during the Wolfe Research Virtual Autos Summit [1] - The webcast will begin at 10:00 AM EDT and will last approximately 40 minutes [1] - Lear Corporation is a global leader in automotive technology, specializing in Seating and E-Systems [2] Group 2 - Lear Corporation is headquartered in Southfield, Michigan, and serves every major automaker globally [2] - The company ranks 174 on the Fortune 500 list [2] - Lear's commitment includes innovation, operational excellence, and sustainability, aiming to enhance in-vehicle experiences [2]

Core Insights - Lear Corporation has appointed Julian Blissett, former Executive Vice President and President of GM China, to its Board of Directors, enhancing its strategic and operational capabilities [1][2] - Blissett brings over 28 years of experience from GM, including significant leadership in China, which is expected to contribute to Lear's growth and success [1] - Lear Corporation is recognized for its operational excellence and innovative strategies in the automotive industry, aiming to enhance in-vehicle experiences globally [2] Company Overview - Lear Corporation is a global leader in automotive technology, specializing in Seating and E-Systems, and serves every major automaker worldwide [2] - The company is headquartered in Southfield, Michigan, and employs a diverse team across 37 countries, focusing on innovation, operational excellence, and sustainability [2] - Lear ranks 174 on the Fortune 500, indicating its significant presence and influence in the automotive sector [2]

Company Operations and Structure - Lear Corporation operates 255 manufacturing, engineering, and administrative locations across 37 countries, with 68% of manufacturing facilities and 86% of employees located in low-cost countries[18]. - The company serves all major automotive manufacturers, with automotive content on over 480 vehicle nameplates worldwide[21]. - The company has made several strategic acquisitions, including I.G. Bauerhin for approximately $175 million in April 2023, enhancing its thermal comfort systems portfolio[27]. - The company has formed sixteen operating joint ventures in five countries, primarily in Asia, to expand market presence and product offerings[115]. - The company holds approximately 2,800 patents and patent applications pending, indicating a strong intellectual property portfolio[109]. Financial Performance - North America sales increased by 3% to $9,749.1 million in 2024, while total sales decreased by 1% to $23,306.0 million[31]. - General Motors accounted for 22% of the company's net sales in 2024, while Ford, Volkswagen, and Mercedes-Benz each represented 11%, and Jaguar Land Rover and Stellantis each accounted for 9%[101]. - Net sales for the year ended December 31, 2024, consisted of 23% from passenger cars, 56% from crossover and sport utility vehicles, and 21% from trucks and vans[105]. - Net sales from consolidated joint ventures accounted for approximately 8% of total net sales in 2024, with investments in non-consolidated joint ventures totaling $221 million[115]. Production and Market Trends - In 2024, total light vehicle production is projected at 88,133.9 thousand units, a 1% decrease from 2023's 89,073.7 thousand units[30]. - The North American light vehicle production is expected to be 15,467.2 thousand units in 2024, down 1% from 15,682.8 thousand units in 2023[30]. - Battery electric vehicle production rose to 11.5 million units in 2024, up from 10.5 million units in 2023, with the market expected to represent 17% of global light vehicle production by 2025[32]. - Crossover and sport utility vehicle production grew to approximately 48% of total vehicle production in 2024, up from 37% five years ago[34]. Product Development and Innovation - Lear Corporation's E-Systems segment includes high-voltage power distribution products, which control the flow of high-voltage power in electrified vehicles, including battery disconnect units[19]. - The ComfortFlex and ComfortMax Seat modules can reduce sub-components by up to 50% and increase airflow directly to the occupant by up to 40% compared to current designs[35]. - The company has developed sustainable products such as FlexAir, a 100% recyclable alternative to traditional foam[38]. - The company has developed a zero gravity seat for second row occupants, featuring a 65-degree recline and various comfort enhancements, which is increasingly important in the China market[54]. - The company launched a new technology for customizable leather designs in 2024, improving comfort and style while enabling airflow for ventilated seats[52]. Sustainability Initiatives - The company aims for a 50% reduction in Scope 1 and Scope 2 carbon emissions by 2030 and aspires to achieve carbon neutrality by 2050[79]. - The company employs standardized processes globally to enhance energy efficiency and reduce greenhouse gas emissions, with a focus on renewable energy usage[80]. - The company is committed to sourcing raw materials sustainably, including leather, and has implemented a No Deforestation Policy for its supply chain[84]. - The company has solar arrays operating at 20 sites across Europe, South America, and China, contributing to its renewable energy strategy[82]. - The company is committed to sustainability and adheres to various environmental regulations, while also offering products that advance sustainability[112]. Employee Engagement and Training - The company’s employee engagement program, Together We Win, focuses on operational excellence and employee involvement metrics[91]. - The company delivered over six million hours of training in 2023, emphasizing safety, development, and leadership across its global operations[95]. Strategic Focus and Future Outlook - The company is focused on investing in product and process innovations to drive growth and profitability[19]. - The company is expanding its E-Systems segment, focusing on high-voltage power distribution products and exiting certain electronics product lines that do not provide sustainable returns[59]. - The company has developed strategies to mitigate the impact of volatile raw material and labor costs, although these strategies may not fully offset adverse impacts[106]. - The current sales backlog is based on independent industry projections and internal estimates, subject to risks including vehicle production volumes and foreign exchange rates[104].