Lear Q4 Earnings Beat Expectations, Revenues Increase Y/Y

Core Insights - Lear Corp. (LEA) reported fourth-quarter 2025 adjusted earnings per share of $3.41, exceeding the Zacks Consensus Estimate of $2.67, driven by strong revenues from the Seating and E-Systems segments. This represents an increase from $2.94 in the same quarter last year [1][9] - Total revenues for the quarter rose 5% year over year to $6 billion, surpassing the Zacks Consensus Estimate of $5.80 billion [1][9] Segment Performance - The Seating segment generated sales of $4.41 billion, up from $4.19 billion in the previous year, and exceeded the Zacks Consensus Estimate of $4.24 billion. Adjusted segment earnings were $263 million, an increase from $257 million year over year, beating the estimate of $243 million. The adjusted margin was 6%, slightly down from 6.1% [2] - The E-Systems segment reported sales of $1.58 billion, up from $1.53 billion year over year, and also topped the Zacks Consensus Estimate of $1.53 billion. Adjusted earnings for this segment were $83.7 million, up from $76.7 million, surpassing the estimate of $70 million. The adjusted margin improved to 5.3% from 5% [3] Regional Performance - North America sales increased 6% year over year to $2.46 billion, exceeding the Zacks Consensus Estimate of $2.39 billion [4] - Sales in Europe and Africa rose 3% year over year to $2.04 billion, slightly missing the Zacks Consensus Estimate of $2.05 billion [4] - Asia region sales totaled $1.26 billion, a 4.5% increase year over year, surpassing the Zacks Consensus Estimate of $1.16 billion [4] - South America sales reached $232.3 million, up from $213.5 million year over year, exceeding the Zacks Consensus Estimate of $217 million [5] Financial Position - As of December 31, 2025, Lear had $1.03 billion in cash and cash equivalents, down from $1.05 billion a year earlier. Long-term debt decreased slightly to $2.71 billion from $2.73 billion [6] - Net cash provided by operating activities was $476 million, with free cash flow of $281 million for the quarter [6] Share Repurchase - During the quarter, Lear repurchased 1,632,456 shares for a total of $175 million, with a remaining share repurchase authorization of nearly $775 million [7] 2026 Guidance - Lear projects full-year net sales between $23,210 million and $24,010 million, compared to $23,259 million in 2025. Core operating earnings are expected to be in the range of $1.03 billion to $1.2 billion, with free cash flow projected between $550 million and $650 million, higher than the $427 million reported in 2025. Capital spending is anticipated to be $660 million, up from $561 million in 2025 [10]