Lear (LEA) Q2 Earnings Beat Estimates, Guidance Revised

Core Viewpoint - Lear Corp. reported a strong second-quarter performance for 2024, with adjusted earnings per share of $3.60, surpassing both the previous year's figure and the consensus estimate [1] Financial Performance - Revenues for the quarter reached $6.01 billion, a slight increase of 0.2% year over year, exceeding the Zacks Consensus Estimate of $6 billion [1] - The E-Systems segment generated sales of $1.57 billion, up 2.2% year over year, and also beat the consensus estimate of $1.55 billion [2] - The Seating segment reported sales of $4.45 billion, a decrease from $4.47 billion in the previous year, missing the consensus estimate of $4.45 billion [7] - Sales in the North America region increased by 3.3% to $2.55 billion, surpassing the consensus estimate of $2.44 billion [8] - Sales in the Europe and Africa region grew by 0.9% to $2.17 billion, exceeding the consensus estimate of $2.13 billion [3] - Sales in the South America region totaled $213.9 million, down from $227.8 million in the previous year, missing the consensus estimate of $222 million [9] - Sales in the Asia region declined by 3.1% to $1.07 billion, missing the consensus estimate of $1.15 billion [13] Segment Performance - Adjusted segment earnings for the E-Systems segment were $82.2 million, up from $63.3 million in the previous year, beating the consensus estimate of $77 million [2] - The adjusted margin for the E-Systems segment improved to 5.3% from 4.1% year over year [2] - Adjusted segment earnings for the Seating segment were $302.1 million, down from $322.1 million in the previous year, missing the consensus estimate of $311 million [7] - The adjusted margin for the Seating segment decreased to 6.8% from 7.2% year over year [7] Cash Flow and Guidance - As of June 29, 2024, the company had $950.3 million in cash and cash equivalents, down from $1.2 billion at the end of 2023 [4] - Long-term debt remained stable at $2.74 billion as of June 29, 2024 [4] - Updated guidance for 2024 includes projected net sales of $23.23-$23.67 billion, down from the previous estimate of $24-$24.6 billion [14] - Operating cash flow is now projected between $1,135 million and $1,285 million, down from the previous outlook of $1,275-$1,425 million [11] - Free cash flow is anticipated in the range of $485-$635 million, reduced from the previous estimate of $600-$750 million [11] - Capital spending is now estimated at $650 million, down from $675 million [11] - Adjusted EBITDA is projected between $1,670 million and $1,840 million, down from the previous guidance of $1,795-$1,945 million [11] Share Repurchase - During the quarter, Lear repurchased 477,932 shares for a total of $60 million, with a remaining share repurchase authorization of nearly $1.4 billion [10]