Southfield-based Lear Corp. (NYSE: LEA), a supplier of automotive seating and electrical power management systems, reported financial results for the third quarter of 2010 and increased its 2010 full year outlook.
Third quarter net sales were $2.8 billion, up 11 percent from a year ago. Third-quarter core operating earnings were $150 million, up 35 percent from a year ago. It was the company’s fifth consecutive quarter of year-over-year improvement. Adjusted earnings per share were $2.28 in the third quarter and $6.44 year-to-date. Sales were up $700 million to $11.7 billion
According to a news release, in the third quarter, global industry production improved 13 percent from a year ago, reflecting primarily industry recovery in North America and continued growth in emerging markets.
“Global industry demand continues to improve, but production levels in the mature markets remain significantly below historical levels. In this environment, we are able to achieve improving operating results and positive cash flow because of the significant structural cost reductions we have implemented over the past few years. Going forward, we intend to hold the line on costs and continue to focus on growing our worldwide sales,” said Bob Rossiter, Lear’s CEO and president.
For the third quarter of 2010, Lear reported net sales of $2.8 billion, pretax income of $103.9 million including restructuring costs and other special items of $30.2 million, and diluted net income per share of $1.76. Income before interest, other expenses, reorganization items, income taxes, restructuring costs and other special items (core operating earnings) was $149.5 million in the third quarter of 2010, and adjusted diluted net income per share (adjusted earnings per share) was $2.28. This compares with net sales of $2.5 billion, pretax income of $49.4 million and core operating earnings of $110.5 million in the third quarter of 2009.
As a result of the improving production environment and Lear’s strong operating performance, the company is increasing its full year 2010 outlook. Key 2010 assumptions include industry vehicle production of approximately 11.8 million units in North America, up 7 percent from the prior outlook, 16.8 million units in Europe, up 5 percent from the prior outlook, and 13.8 million units in China, up 3 percent from the prior outlook. Financial guidance is based on an average full year exchange rate of $1.33/Euro.
Lear expects 2010 net sales of approximately $11.7 billion, up $700 million from the prior outlook, and 2010 core operating earnings of $550 million to $600 million, up $100 million from the prior outlook. Free cash flow in 2010 is expected to be approximately $350 million, up $100 million from prior guidance.