Financial Data and Key Metrics Changes - The company reported revenue of $5.6 billion for the first quarter of 2025, with core operating earnings of $270 million and operating margins improving to 4.9% [6][32] - Adjusted earnings per share were $3.12, down from $3.18 a year ago, while operating cash flow was a use of $128 million in the first quarter [6][32] Business Line Data and Key Metrics Changes - In the Seating segment, sales were $4.2 billion, a decrease of 7% year-over-year, with adjusted operating margins at 6.7% [33] - The E Systems segment reported sales of $1.4 billion, also down 7% year-over-year, with adjusted earnings of $74 million and operating margins at 5.2% [34] Market Data and Key Metrics Changes - Global vehicle production increased by 1% year-over-year, but Lear's sales-weighted production declined by 5%, with North America down 5% and Europe down 7% [28][30] - In China, production volumes increased by 12%, but Lear's business lagged industry growth estimates by 5% [30] Company Strategy and Development Direction - The company aims to extend its leadership in Seating, expand margins in E Systems, and support sustainable value creation through disciplined capital allocation [7][8] - The company is focusing on operational excellence and innovation, particularly through its ComfortFlex modules, which have received positive recognition [9][10] Management's Comments on Operating Environment and Future Outlook - Management noted that the ongoing international trade negotiations have introduced significant uncertainty, particularly regarding tariffs and production volumes [35][36] - The company remains confident in recovering the costs associated with tariffs and is adjusting its capital spending in response to the weaker industry production outlook [38][39] Other Important Information - The company has paused share repurchase activities to maintain liquidity during uncertain times, with plans to resume once visibility improves [40][41] - The company has reduced its global hourly headcount by nearly 19,000 since the end of 2023, contributing to operational efficiency [17][18] Q&A Session Summary Question: Have you seen any meaningful changes to production schedules? - Management acknowledged that changes have been announced but noted the environment remains dynamic, leading to the decision to withdraw guidance due to uncertainty [48][49] Question: Is there a way to get your customers to be the importer of record for tariff reimbursements? - Management confirmed they are discussing options with customers regarding who will be the importer of record and are considering moving production around [55][56] Question: What is the lower end of your outlook contemplating as far as LVP by region? - Management indicated that the February guidance anticipated a 1% global production decline, with significant uncertainty remaining, particularly in North America [69][70] Question: What drove the better-than-expected margin performance? - Management attributed the improved margins to better-than-expected production and a strong finish in March, along with strong operating performance across both business segments [96][97] Question: Are you pausing the buyback while figuring out the outlook for free cash flow? - Management confirmed they are pausing share repurchases temporarily until there is more visibility on production plans [91][92]

Financial Data and Key Metrics Changes - The company reported revenue of $5.6 billion for the first quarter of 2025, with core operating earnings of $270 million and operating margins improving to 4.9% [5][29] - Adjusted earnings per share were $3.12, down from $3.18 a year ago, while operating cash flow was a use of $128 million in the first quarter [5][29] Business Line Data and Key Metrics Changes - In the Seating segment, sales decreased by 7% year-over-year to $4.2 billion, with adjusted earnings of $280 million and operating margins of 6.7% [30] - The E Systems segment also saw a 7% decline in sales to $1.4 billion, with adjusted earnings of $74 million and operating margins of 5.2% [31] Market Data and Key Metrics Changes - Global vehicle production increased by 1% year-over-year, but Lear's sales-weighted production was down 5%, with North America and Europe seeing declines of 5% and 7%, respectively [25][26] - In China, production volumes were up 12%, but Lear's business lagged industry growth estimates by five percentage points [27][28] Company Strategy and Development Direction - The company aims to extend its leadership in Seating, expand margins in E Systems, and support sustainable value creation through disciplined capital allocation [6][12] - Investments in automation and restructuring are expected to drive durable operating performance and margin improvements [15][34] Management's Comments on Operating Environment and Future Outlook - Management noted significant uncertainty in the automotive industry due to ongoing international trade negotiations and the impact of tariffs [32][34] - The company is confident in recovering costs associated with tariffs and is actively managing both direct and indirect exposures [17][19] Other Important Information - The company repurchased $25 million worth of shares during the quarter, but has paused share repurchase activity to maintain liquidity amid uncertainty [36][37] - The company has a strong balance sheet with $2.8 billion in available liquidity and no near-term debt maturities [35] Q&A Session Summary Question: Have you seen any meaningful changes to production schedules? - Management acknowledged seeing changes announced over the past few weeks but noted the environment remains dynamic [43][44] Question: Is there a way to get your customers to be the importer of record for tariff reimbursement? - Management confirmed they are discussing options with customers regarding who will be the importer of record [50][51] Question: What is the lower end of your outlook contemplating as far as LVP by region? - Management indicated that the February guidance anticipated a 1% global production decline and a 2% decline on a Lear-weighted basis [64] Question: How are you starting to see performance separate from competitors? - Management highlighted strong operational performance and innovation as key factors in gaining market share [72][75] Question: Do you see any risk from the current uncertainty on backlog? - Management stated it is too early to provide an update on the backlog but noted that new business awards will help long-term growth [88][90]

Financial Data and Key Metrics Changes - The company reported revenue of $5.6 billion for Q1 2025, with core operating earnings of $270 million and operating margins improving to 4.9% [6][12][31] - Adjusted earnings per share were $3.12, down from $3.18 a year ago, and operating cash flow was a use of $128 million in the first quarter [6][31] Business Line Data and Key Metrics Changes - In the Seating segment, sales decreased by 7% year-over-year to $4.2 billion, with adjusted operating margins at 6.7% [31][32] - The E Systems segment also saw a 7% decline in sales to $1.4 billion, with adjusted earnings of $74 million, reflecting a slight increase in operating margins to 5.2% [32][33] Market Data and Key Metrics Changes - Global vehicle production increased by 1% year-over-year, but Lear's sales-weighted production was down 5%, with North America and Europe seeing declines of 5% and 7% respectively, while China experienced a 12% increase [26][27] - Lear's sales growth in Europe outperformed industry production by 2 percentage points, while North America lagged by 2 percentage points [27][28] Company Strategy and Development Direction - The company aims to extend its leadership in Seating, expand margins in E Systems, and support sustainable value creation through disciplined capital allocation [7][12] - Recent awards in Seating and E Systems, including significant contracts with major automakers, highlight the company's focus on innovation and operational excellence [8][11][41] Management's Comments on Operating Environment and Future Outlook - Management noted ongoing uncertainty in the automotive industry due to international trade negotiations and tariff impacts, leading to a withdrawal of full-year guidance [34][35] - Despite challenges, the company remains confident in recovering tariff costs and achieving operational performance improvements [35][36] Other Important Information - The company has paused share repurchases to maintain liquidity during uncertain times, with plans to resume once visibility improves [39][86] - A strong balance sheet with no near-term debt maturities and $2.8 billion in available liquidity positions the company well for future challenges [38][39] Q&A Session Summary Question: Have you seen any meaningful changes to production schedules? - Management acknowledged some changes in production schedules but noted the environment remains dynamic, leading to the decision to withdraw guidance due to uncertainty [46][48] Question: Is there a way to get customers to be the importer of record for tariff reimbursements? - Management confirmed they are discussing options with customers regarding who will be the importer of record to maximize tariff reimbursement opportunities [52][53] Question: What is the lower end of your outlook contemplating as far as LVP by region? - Management indicated that the original guidance anticipated a 1% global production decline, with potential adjustments based on foreign exchange rates and market conditions [64][66] Question: How are you starting to see performance separate from competitors? - Management highlighted strong operational performance and innovation as key factors in gaining market share, particularly in E Systems [72][75] Question: Will you be able to offset indirect tariff impacts with accelerated restructuring benefits? - Management expressed confidence in achieving additional net performance from increased restructuring investments, despite dialing back capital spending [78][79]

Financial Performance - Sales decreased from $6 billion in Q1 2024 to $5.6 billion in Q1 2025[10] - Core operating earnings decreased from $280 million in Q1 2024 to $270 million in Q1 2025[10] - Adjusted earnings per share decreased from $3.18 in Q1 2024 to $3.12 in Q1 2025[10] - Operating cash flow decreased from negative $35 million in Q1 2024 to negative $128 million in Q1 2025[10] Segment Performance - Seating sales decreased from $4478 million in Q1 2024 to $4151 million in Q1 2025[27] - E-Systems sales decreased from $1517 million in Q1 2024 to $1409 million in Q1 2025[32] - Seating adjusted earnings were $294.9 million in Q1 2024 and $279.9 million in Q1 2025, with adjusted margins of 6.6% and 6.7% respectively[56] - E-Systems adjusted earnings were $77.1 million in Q1 2024 and $73.8 million in Q1 2025, with adjusted margins of 5.1% and 5.2% respectively[56] Production and Currency - Global vehicle production increased by 1% year-over-year, North America decreased by 5%, Europe and Africa decreased by 7%, and China increased by 12%[20] - The Euro decreased by 4% from $1.09/€ in Q1 2024 to $1.05/€ in Q1 2025[21]

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]