What To Expect From Lear Corporation’s Q2 2018 Results

-10.25%
Downside
145
Market
130
Trefis
LEA: Lear logo
LEA
Lear

Lear Corporation (NYSE: LEA) will release its second-quarter results and conduct a conference call with analysts on 26th July 2018. The company is expected to post an EPS (Non-GAAP) of $5.05 and a revenue of $5.6 billion, 15% and 9% higher, respectively, than the reported figures a year ago. The company’s strong performance for the quarter is likely to be driven by its product mix improvement, however, relatively flatter margins are expected to weigh on Lear’s overall performance.

Lear’s first-quarter revenue increased by 15% year-on-year (y-o-y), with strong growth experienced across both the business segments. Acquisition of Grupo Antolin’s seating business coupled with favorable currency gains aided the company’s top line growth. On the backdrop of such strong results, the company had also revised its full-year guidance by $400 million during its first-quarter earnings release to $21.8 billion to $22 billion, from its original guidance of $21.4 to $21.6 billion. Additionally, the U.S. automobile industry’s transition toward crossovers and SUVs are expected to continue to remain favorable for Lear and add to its revenue, as bigger cars such as SUVs and crossovers command premium content per vehicle (premium/ additional seating and more advanced electric content). Thus these favorable developments are expected to shape a stronger top line for the company through the remainder of 2018.

Lear’s margins, however, are expected to remain relatively weak throughout the year as the company expects to face cost headwinds due to increased costs associated with program changeovers, accelerated new business coating activity, and higher commodity costs, primarily associated with steel and copper. Additional expenditure related to investments to support the company’s backlog are also expected to result in higher costs for the year. Consequently, in the previous quarter, the company’s margins for both of its product segments declined and its total margins remained relatively flat. Weaker margins are expected to weigh on the company’s total performance throughout the year.

Relevant Articles
  1. Advance Auto Parts’ Stock To Continue Its Rise?
  2. Dana Inc’s Stock Fell 13% In The Last Week, Will It Rebound?
  3. Does Lear Stock Have An Upside At $164?
  4. Is Goodyear Tire & Rubber Stock Overvalued?
  5. Goodyear Tire & Rubber Stock Has 25% Upside
  6. After A 300% Rally, Sonic Automotive’s Stock Looks Expensive

The details of our full-year outlook for the company has been outlined in our interactive dashboard. You can make changes to our key assumptions in our interactive platform to arrive at your own fair price estimate for the company.

 

What’s behind Trefis? See How it’s Powering New Collaboration and What-Ifs

For CFOs and Finance Teams | Product, R&D, and Marketing Teams

More Trefis Research

Like our charts? Explore example interactive dashboards and create your own.