Lear earnings beat Wall Street expectations
DETROIT (Reuters) - Auto parts maker Lear Corp (LEA.N) beat Wall Street fourth quarter profit and sales expectations on rising auto sales in North America, the company said on Friday.
The spike of auto sales in Lear's home market overcame a slight drop in Europe, where the auto industry continues its downward trend.
Lear, the maker of auto seats and electrical power systems, confirmed the 2013 outlook it gave three months ago. That outlook includes sales in the range of $15 billion to $15.5 billion, up from 2012's revenue of $14.57 billion.
"We continue to win new business globally and expect to benefit from the investments that we are making in component capabilities and the emerging markets," said Matt Simoncini, president and chief executive officer.
Lear sees 2013 industrywide auto production on North America rising 1 percent, falling 4 percent in Europe and rising 9 percent in China.
North America made up 39 percent of overall company fourth quarter sales, compared with 33 percent from Europe, 18 percent in Asia and 10 percent in the rest of the world. A year ago, Lear's sales in Europe were higher than in North America.
For the fourth quarter, Lear's sales in North America rose 14 percent, fell 1 percent in Europe, and rose 13 percent in Asia.
Lear, based in suburban Detroit, reported a net income of $881.9 million, and earnings per share of $9.00, which compares with $106.5 million and $1.03 earnings per diluted share a year ago.
The fourth quarter net income was inflated by tax benefits of $739.3 million, mainly the reversal of a tax valuation allowance of $767 million.
Excluding one-time items, Lear posted earnings per share of $1.48 in the quarter, which beat expectations of $1.37 by analysts polled by Thomson Reuters I/B/E/S.
Revenue in the quarter was $3.72 billion, up from $3.51 billion a year before. Analysts had expected quarterly revenue of $3.55 billion, according to Thomson Reuters I/B/E/S.
For the full year, Lear reported a rise of 3 percent in revenue to $14.57 billion. Yearly net income was $1.28 billion, or $12.85 per diluted share, up from $540.7 million, or $5.08 per diluted share in 2011. The 2012 net income includes the tax valuation allowance from the fourth quarter.
In January, Lear's board authorized increasing its share repurchase program by $800 million, bringing the total to $1 billion over the next three years. In the fourth quarter, Lear repurchased 1.2 million shares for $50 million and in 2012 bought 5.4 million shares for $223 million.
Among Lear sales, 76 percent comes from its seating business and the remainder for its electrical power systems business.
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