) posted a 12.4% rise in adjusted earnings per share to $1.45 in
the third quarter of 2013 compared with $1.29 per share in the
year-ago quarter. Earnings beat the Zacks Consensus Estimate by
Revenues increased 10.7% to $3.92 billion in the reported
quarter, beating the Zacks Consensus Estimate of $3.83 billion.
Global industry production increased 4% year over year, with an
8% rise in China and 6% hike in North America. Industry
production in Europe and Africa went up 2%.
Core operating income improved 15.2% to $206.5 million from
$179.3 million in the third quarter of 2012.
Revenues from the Seating segment went up 8.6% year on year to
$2.9 billion driven by higher production on key platforms
together with addition of new business. Adjusted earnings
declined 3.7% to $155.1 million or 5.4% of sales in the quarter.
The year-over-year decline in earnings was due to changeover of
key programs, partially offset by higher sales and better
Revenues from Electrical Power Management Systems segment rose
17% to $1.03 billion due to the addition of new business and
higher production on key platforms. Adjusted earnings surged 70%
to $112.2 million or 10.9% of sales in the quarter, driven by
increase in sales and improved operating efficiencies.
Lear had cash and cash equivalents of $884 million as of Sep 28,
2013, down from $1.4 billion as of Dec 31, 2012. Long-term debt
rose to $1.1 billion as of Sep 28, 2013 compared with $626.3
million as of Dec 31, 2012.
In the first nine months of 2013, cash flow from operating
activities increased 19.1% to $429.6 million from $360.7 million
in the same period of 2012. Capital expenditure (adjusted)
increased 11.4% to $322.1 million compared with $289.1 million a
year ago. These led to a free cash flow of $107.5 million in the
first nine months of 2013 compared with a free cash flow of $71.6
million in the year-ago period.
For 2013, Lear anticipates revenues of $16 billion, up from the
prior expectation of $15.8 billion. Lear expects industry vehicle
production of 19.5 million units in Europe and Africa, up 1% from
the prior outlook. However, it retained its expectations of
industry vehicle production of 16.2 million units in North
America and 18.7 million units in China.
Adjusted net earnings are expected to be $505 million for the
year. Core operating earnings are anticipated to be approximately
$835 million, up from previous outlook of $750 to $800 million.
Free cash flow is expected to be around $325 million. Adjusted
capital expenditure and depreciation and amortization expense are
estimated to be $450 million and $285 million, respectively, for
Lear Corporation designs, manufactures, assembles and supplies
automotive seat systems, electrical distribution systems, and
related components primarily to automotive original equipment
manufacturers. The company sells its products chiefly in North
America, South America, Europe, and Asia. The company retains a
Zacks Rank #3 (Hold).
Other stocks that are also performing well in the automotive
components industry include
). All these are Zacks Rank #1 (Strong Buy) stocks.
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