Lear profit tops estimate, share buyback boosted
DETROIT (Reuters) - Lear Corp (LEA.N) posted a stronger-than-expected quarterly profit on Thursday and boosted its share buyback program by $750 million.
The maker of auto seats and electrical power systems also boosted its full-year production forecasts across all regions and reaffirmed its outlook for 2013 sales.
Net income in the first quarter attributable to Lear fell 19 percent to $108.5 million, or $1.13 a share, from $134.1 million, or $1.32 a share, in the year earlier period.
Excluding one-time items, Lear earned $1.30 a share, 20 cents above what analysts polled by Thomson Reuters I/B/E/S had expected.
Revenue rose 8 percent from last year to $3.95 billion, while analysts expected $3.71 billion.
In the seating business, Lear said sales rose 3 percent, while in the electrical power management systems unit sales jumped 25 percent.
The Southfield, Michigan-based company said in April the board authorized an additional $750 million in share repurchases, bringing the total available buyback authorization to $1.55 billion. The available repurchase authorization reflects about one-third of Lear's current market capitalization.
Lear also said on Thursday that it has entered an agreement with Citibank to buy back $800 million of its stock. Lear said it will fund the deal and retire about 12 million shares within the next week.
Lear said it will acquire the shares under the previously announced repurchase program and the transaction will be funded with cash on hand and is expected to be completed within 11 months.
Earlier in April, Lear avoided a proxy battle with investors Marcato Capital Management LLC and Oskie Capital Management LLC by agreeing to increase and quicken the pace of its share buyback program and add a board member.
The company said it still expects 2013 full-year sales in the range of $15 billion to $15.5 billion. It expects adjusted net income in the range of $420 million to $455 million.
Analysts are expecting 2013 sales of $15.29 billion and earnings of $4.93 a share.
However, Lear raised its forecasts for industry vehicle production in each region. It now sees North American production of 16.1 million vehicles in 2013, up 3 percent from the prior outlook.
Lear forecasts production in Europe and Africa of 19.1 million vehicles, up 1 percent from before. It also raised its forecast for China production by 1 percent to 18.8 million vehicles.
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