(In 7th paragraph, corrects sales figure for Europe and Africa
to $1.83 billion, not $1.58 billion)
By Bernie Woodall
DETROIT, July 25 Lear Corp, maker of
auto seats and electrical power systems, on Friday beat Wall
Street's earnings expectations for the second quarter and
increased its full-year outlook, sending its shares up as much
as 5 percent.
The stronger-than-expected results came despite weakness in
South America and flat margins in the company's important
Excluding one-time items that were primarily restructuring
costs, Lear earned $2.12 per share. Analysts polled by Thomson
Reuters I/B/E/S had expected $1.97.
Chief Executive Officer Matt Simoncini said the company had
set quarterly records for sales and core operating earnings
because of investments to improve its "cost structure and
expanding our component capabilities globally."
Revenue rose 11 percent to $4.59 billion, exceeding
expectations of $4.44 billion, against the backdrop of auto
industry production growth of 3 percent in the second quarter.
Profit margins for the suburban Detroit company rose to 6
percent from 5.4 percent a year earlier. Margins in the
electrical systems business were 12.5 percent, up from 9.7
percent, but dipped in the larger seating business to 5.7
percent from 5.8 percent.
Sales in the company's Europe and Africa business, $1.83
billion, accounted for 40 percent of the total, followed by
North America at $1.74 billion, or 38 percent. Asian sales of
$774.3 million accounted for 17 percent, and South America had
$237.7 million, or 5 percent.
Sales rose 16 percent in Europe and Africa, 12 percent in
North America and 10 percent in China but fell 13 percent in
Lear joined other automotive-related companies in
experiencing a fall in South American business as the region's
countries like Brazil, Argentina and Venezuela are going through
difficult economic times.
Net income for the quarter rose to $148.5 million, or $1.81
per share, from $137.3 million, or $1.60 per share, a year
The company said it expected sales for the year to range
from $17.6 billion to $17.9 billion. It had previously forecast
$17.2 billion to $17.7 billion.
Lear said it expected core operating earnings of $975
million to $1.025 billion, up from a previous range of $935
million to $985 million.
In morning trading, Lear shares rose 3.4 percent to $99.02
on the New York Stock Exchange after trading as high as $100.58.
(Reporting by Bernie Woodall; Editing by Lisa Von Ahn)