) posted a 17.5% rise in adjusted earnings per share to $1.48 in
the fourth quarter of 2012 from $1.26 in the corresponding
quarter last year. Profits in the quarter beat the Zacks
Consensus Estimate by a dime. In absolute terms, profits went up
10.4% to $144.6 million from $131.0 million in the year-ago
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Revenues increased 6% to $3.7 million in the reported quarter,
surpassing the Zacks Consensus Estimate of $3.5 million. Global
industry production increased 2% year over year, with a 10% hike
in North America and 4% rise in China. However, production in
Europe decreased 8%.
Revenues from the
segment went up 3% to $2.8 billion, driven by benefits from the
acquisition of Guilford and addition of new business, which was
partially offset by the adverse impact of foreign currency
translation and lower production from Europe.
Adjusted earnings declined to $162.8 million or 5.9% of sales in
the quarter. The year-over-year fall in earnings was due to lower
production from Europe, increased launch costs in South America
and higher program development costs for the new business.
Electrical Power Management Systems
segment rose 14% to $958.6 million. Addition of new businesses
had a favorable impact on revenues, partially offset by the
negative impact of foreign exchange.
Adjusted earnings went up to $80.5 million or 8.4% of sales in
the quarter, driven by increase in sales and productivity, which
was partially offset by increased product and facility launch
costs, and program development costs.
Lear repurchased 1.2 million shares for $50 million in the
quarter. During 2012, the company has repurchased 5.4 million
shares for $223 million. Since the inception of the share
repurchase program, the company has repurchased 11.5 million
shares for $502 million.
In Jan 2013, the company has authorized an additional $800
million for repurchase under the existing share repurchase
program and extended the authorization till Jan 10, 2016. With
this, the company had approximately $1.0 billion worth of shares
remaining under its share repurchase program at the end of the
Lear had cash and cash equivalents of $1.4 billion as of Dec 31,
2012, declining from $1.8 billion as of Dec 31, 2011. Long-term
debt amounted to $626.3 million as of Dec 31, 2012 compared with
$695.4 million as of Dec 31, 2011.
For full year 2012, cash flow from operating activities amounted
to $369.1 million, up from $273.8 million in 2011. Capital
expenditure amounted to $150.0 million compared with $78.3
million in 2011. The company had free cash flow of $219.1 million
in 2012 compared with $195.5 million in 2011.
Fiscal 2012 Results
Lear reported 2012 adjusted earnings per share of $5.49, up 2.8%
from $5.34 a year ago. Reported earnings increased more than
doubled to $12.85 per share from $5.08 in 2011. Revenues
increased 2.8% to $14.6 billion from $14.2 billion in 2011.
In 2013, Lear anticipates revenues between $15.0 and $15.5
billion, with operating earnings in the range of $725.0-$775.0
million. Adjusted net income is expected between $420.0 million
and $455.0 million for the year. Free cash flow is estimated to
be $275.0 million, which is lower than 2012 due to higher taxes
and interest expenses. Capital spending is expected to be $450.0
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).
Commercial Vehicle Group Inc.
) with Zacks Rank #1 (Strong Buy) are performing well in the same
industry where Lear operates.