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What's in the Cards for Lear (LEA) This Earnings Season?
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Lear Corporation (LEA - Free Report) is set to release second-quarter 2018 results before the market opens on Jul 26. In the last reported quarter, the company delivered a positive earnings surprise of 3.9%. In fact, the company has surpassed earnings estimates in the trailing four quarters, recording an average beat of 4.2%.
In the past three months, shares of Lear have underperformed the industry it belongs to. During the period, the stock has lost 5.7% in comparison with the industry’s decline of 4.3%.
Let’s see how things are shaping up for the forthcoming announcement.
Both the segments of Lear, namely Seating and E-Systems, hold good growth opportunities. The growing demand for crossover and sports utility vehicles will drive Seating segment while rising consumer demand for vehicle content and the need for electrification will enable the E-Systems to witness growth.
In 2018, the company plans to launch products that will drive sales for both the business segments. Further, along with increased core operating margins, it anticipates sales to increase from $22 billion in 2018 to more than $30 billion in 2023.
For the soon-to-be-released quarterly results, the Zacks Consensus Estimate for net sales for the Seating segment is pegged at $4.27 billion. , First quarter’s net sales for Seating segment was $4.33 billion.
Similarly, consensus estimates for net sales of the company’s E-Systems segment stand at $1.23 billion. First quarter net sales for the Seating segment was $1.4 million.
Additionally, in May, Lear’s board announced a dividend per share of 70 cents. The amount was paid on Jun 27 to shareholders as of Jun 8. Earlier, in March, the company raised the quarterly dividend by 40% to 70 cents per share and repurchased approximately 829,000 shares for total $155 million. Regular dividend payments and share repurchases boost shareholders’ confidence in the company.
However, continuous rise in capital expenses is a concern for the company. In first-quarter 2018, the figure rose to $162.8 million from $120.8 million in the prior year.
Over the past seven days, the company’s stock has seen the Zacks Consensus Estimate for second-quarter earnings being revised 1% downward, respectively.
Earnings Whispers
Our proven model does not conclusively show that Lear is likely to beat earnings this quarter. This is because, a stock needs to have both a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. But that is not the case here as you will see below.
Earnings ESP: Lear has an Earnings ESP of 0.00% as both the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at $4.91. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Lear currently carries a Zacks Rank #3. Further, this, combined with its Earnings ESP, makes the surprise prediction difficult. Note that we caution against Rank #4 and 5 (Sell-rated) stocks going into the earnings announcement, especially, when the company is witnessing negative estimate revisions.
Stocks to Consider
Here are a few other stocks worth considering from the same space, with the right combination of elements to outpace earnings estimates this time around:
Oshkosh Corporation (OSK - Free Report) has an Earnings ESP of +2.85% and has a Zacks Rank of 2. The company is scheduled to report third-quarter fiscal 2018 results on Jul 31.
Cummins Inc. (CMI - Free Report) has an Earnings ESP of +1.28% and a Zacks Rank #3. The company’s second-quarter 2018 financial results are scheduled to release on Jul 31.
American Axle & Manufacturing Holdings, Inc. (AXL - Free Report) has an Earnings ESP of +0.89% and a Zacks Rank #2. Its second-quarter 2018 results are expected to release on Aug 3.
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What's in the Cards for Lear (LEA) This Earnings Season?
Lear Corporation (LEA - Free Report) is set to release second-quarter 2018 results before the market opens on Jul 26. In the last reported quarter, the company delivered a positive earnings surprise of 3.9%. In fact, the company has surpassed earnings estimates in the trailing four quarters, recording an average beat of 4.2%.
In the past three months, shares of Lear have underperformed the industry it belongs to. During the period, the stock has lost 5.7% in comparison with the industry’s decline of 4.3%.
Let’s see how things are shaping up for the forthcoming announcement.
Lear Corporation Price and EPS Surprise
Lear Corporation Price and EPS Surprise | Lear Corporation Quote
Factors to Consider
Both the segments of Lear, namely Seating and E-Systems, hold good growth opportunities. The growing demand for crossover and sports utility vehicles will drive Seating segment while rising consumer demand for vehicle content and the need for electrification will enable the E-Systems to witness growth.
In 2018, the company plans to launch products that will drive sales for both the business segments. Further, along with increased core operating margins, it anticipates sales to increase from $22 billion in 2018 to more than $30 billion in 2023.
For the soon-to-be-released quarterly results, the Zacks Consensus Estimate for net sales for the Seating segment is pegged at $4.27 billion. , First quarter’s net sales for Seating segment was $4.33 billion.
Similarly, consensus estimates for net sales of the company’s E-Systems segment stand at $1.23 billion. First quarter net sales for the Seating segment was $1.4 million.
Additionally, in May, Lear’s board announced a dividend per share of 70 cents. The amount was paid on Jun 27 to shareholders as of Jun 8. Earlier, in March, the company raised the quarterly dividend by 40% to 70 cents per share and repurchased approximately 829,000 shares for total $155 million. Regular dividend payments and share repurchases boost shareholders’ confidence in the company.
However, continuous rise in capital expenses is a concern for the company. In first-quarter 2018, the figure rose to $162.8 million from $120.8 million in the prior year.
Over the past seven days, the company’s stock has seen the Zacks Consensus Estimate for second-quarter earnings being revised 1% downward, respectively.
Earnings Whispers
Our proven model does not conclusively show that Lear is likely to beat earnings this quarter. This is because, a stock needs to have both a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. But that is not the case here as you will see below.
Earnings ESP: Lear has an Earnings ESP of 0.00% as both the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at $4.91. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Lear currently carries a Zacks Rank #3. Further, this, combined with its Earnings ESP, makes the surprise prediction difficult. Note that we caution against Rank #4 and 5 (Sell-rated) stocks going into the earnings announcement, especially, when the company is witnessing negative estimate revisions.
Stocks to Consider
Here are a few other stocks worth considering from the same space, with the right combination of elements to outpace earnings estimates this time around:
Oshkosh Corporation (OSK - Free Report) has an Earnings ESP of +2.85% and has a Zacks Rank of 2. The company is scheduled to report third-quarter fiscal 2018 results on Jul 31.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Cummins Inc. (CMI - Free Report) has an Earnings ESP of +1.28% and a Zacks Rank #3. The company’s second-quarter 2018 financial results are scheduled to release on Jul 31.
American Axle & Manufacturing Holdings, Inc. (AXL - Free Report) has an Earnings ESP of +0.89% and a Zacks Rank #2. Its second-quarter 2018 results are expected to release on Aug 3.
Looking for Stocks With Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>