The bulk of the increased sales and income stems from rising vehicle production, which grew by 15% in the quarter globally. By region, production gained 15% in North America, 15% in Europe and 19% in China.
Lear Corp.
Lear improved margins in its seating and e-systems segments over the first quarter of this year.
Seating supplier Lear Corp. continues to ride the wave of increased auto production, reporting positive financial results in the second quarter of 2023.
The world’s 10th-largest auto supplier on Tuesday said net income more than doubled to $169 million during the second quarter while revenue improved 18 percent to $6 billion.
The bulk of the increased sales and income stems from rising vehicle production, which grew by 15 percent in the quarter globally. By region, production gained 15 percent in North America, 15 percent in Europe and 19 percent in China.
Lear also improved margins in both its seating and e-systems segments over the first quarter of this year. Seating segment margins in the second quarter were 6.6 percent of sales, compared with 6.4 percent of sales last quarter. E-systems reported margins of 3.5 percent of sales, compared to 3 percent of sales last quarter.
“Lear’s positive momentum accelerated in the second quarter with record sales and improved operating results in both business segments,” CEO Ray Scott said in a statement. “Core operating earnings in the quarter were the highest in over two years and sales once again outpaced market growth rates.”
Due to its second quarter performance, Lear has also raised its 2023 financial outlook, raising projected revenue to between $22.35 billion and $23.05 billion for the year. Last quarter, it projected 2023 to total between $21.2 billion and $22.2 billion.
Fewer supply chain problems, more consistent customer assembly lines and higher production in Europe all contributed to higher revenue than initially anticipated, Scott said at the Deutsche Bank Global Auto Industry Conference on June 14. “It’s been a long time since I’ve been this confident in where we’re at with the business,” Scott said during the conference.
Lear also continued to repurchase its own shares, a practice it’s been doing for a dozen years. During the second quarter of this year, Lear repurchased $38 million worth of shares. Since 2012, the supplier has repurchased $4.9 billion in shares, equaling about 51% of the outstanding shares before the program began.
Wall Street has rewarded the supplier’s upbeat financial reports. Lear shares (NYSE: LEA) are up nearly 23 percent for the year at $154.76, well above the Dow Jones Industrial Average, which is up 7.31 percent year-to-date. Shares in Lear rose 0.5 percent to $155.49 in midday trading on Tuesday.
Lear, based in suburban Detroit, ranks No. 10 on the Automotive News list of the top 100 global suppliers with worldwide sales to automakers of $20.1 billion in 2022.
