Lear’s Strong Momentum Continues For Q2 2017, Increases Full Year Financial Outlook
Lear Corporation (NYSE:LEA) reported its Q2 2107 results on July 26th, beating consensus estimates with revenues of $5.1 billion (up 8% year on year) and EPS (earnings per share) of $4.49 (up 20% year on year). The company continued to grow its sales faster than industry production and improved its margins in both its segments of operation. Below is a summary of the company’s financial performance for Q2 2017:
While the gross margin was slightly lower compared to the same period in the previous year, lower administrative expenses led to a higher net income for this quarter. South America and Asia have been the bright spots for Lear in terms of revenue growth. Global sales increased 8% year on year and this figure would have been 10% if the impact of foreign exchange is excluded. Collectively the acquisition of Grupo and AccuMED contributed around $110 million to the company’s top line in this quarter. The company’s industry leading cost structure ensures that higher margins are maintained throughout the revenue growth cycle.
Below is a summary of the segment-wise performance of Lear:
- Income is defined as pretax income before equity in net income of affiliates, interest expense and other expense.
Improvement In Future Guidance
In 2017, the company expects $20 billion in sales and an adjusted net income of $1.1 billion as it expects an improved financial performance post acquisition of Grupo Antolin’s seating business. Revenue guidance is being increased by $500 million due to the impact of the acquisition. Further, the guidance for core operating income is being increased by $50 million reflecting its continuing strong performance.
Lear’s unique product capabilities allow the company to capitalize on emerging industry trends. Its unique software and electronic capabilities enable the seat to transfer information to and from the occupant for a more enjoyable and safer driving experience. This unique synergy between both its segments is likely to be a key growth driver for the company in the long term.
Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for Lear Corporation
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