We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Lear (LEA) Q1 Earnings & Revenues Miss Estimates, Down Y/Y
Read MoreHide Full Article
Lear Corporation (LEA - Free Report) reported first-quarter 2019 adjusted earnings per share of $4 compared with $5.10 recorded in the prior-year quarter. Also, the bottom line missed the Zacks Consensus Estimate of $4.06. At the end of first-quarter 2019, adjusted net income was $253 million compared with $345 million recorded in the prior-year quarter.
During the reported quarter, revenues decreased 10% year over year to $5.2 billion, whereas the Zacks Consensus Estimate was pegged at $5.7 billion. Revenues were impacted by lower production on key Lear platforms, which were partly offset by the addition of new business.
Moreover, the company’s core operating earnings declined to $378 million from $491 million in first-quarter 2018.
Lear Corporation Price, Consensus and EPS Surprise
In the reported quarter, net sales at the Seating segment were $3.9 billion compared with $4.3 billion in first-quarter 2018. The adjusted margin was 7.6% compared with 8.3% in the prior-year quarter.
Net sales at the E-Systems segment was $1.2 billion compared with $1.4 billion generated in the year-ago quarter. Additionally, adjusted margin was 11.3% compared with 14.1% in first-quarter 2018.
Financials
Lear had $1.2 billion of cash and cash equivalents as of Mar 30, 2019, down from $1.5 billion recorded on Dec 31, 2018. The company had long-term debt of $1.94 billion as of Mar 30, 2019, almost unchanged from the figure as of Dec 31, 2018.
At the end of first-quarter 2019, Lear’s net operating cash inflow was $51.6 million in comparison with $236.8 million as of Mar 31, 2018. During the period, its capital expenditure was $122.8 million, marking a decrease from $162.8 million recorded in the prior-year quarter.
Capital Deployment
During the reported quarter, Lear repurchased 804,270 shares for $118 million. As of the end of the fourth quarter, the company had remaining share repurchase authorization of $1.47 billion.
2019 Outlook
Lear reiterated its 2019 guidance. The company currently expects net sales of $20.9-$21.7 billion and adjusted net income of $1.08-$1.17 billion. Further, it projects capital spending of roughly $700 million compared with the last year’s capital expenditure of $677 million.
Zacks Rank & Stocks to Consider
Lear currently carries a Zacks Rank #3 (Hold). A few better-ranked stocks in the broader auto sector are Geely Automobile Holdings Ltd. (GELYY - Free Report) , PACCAR Inc. (PCAR - Free Report) and Fox Factory Holding Corp. (FOXF - Free Report) .
Geely Automobile has an expected long-term growth rate of 7%. Share price of the company has increased 25.6% in the past three months.
PACCAR has an expected long-term growth rate of 8.4%. Over the past three months, shares of the company have gained 9.6%.
Fox Factory has an expected long-term growth rate of 5%. Shares of the company have gained 31.7% in the past three months.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.
This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.
Image: Bigstock
Lear (LEA) Q1 Earnings & Revenues Miss Estimates, Down Y/Y
Lear Corporation (LEA - Free Report) reported first-quarter 2019 adjusted earnings per share of $4 compared with $5.10 recorded in the prior-year quarter. Also, the bottom line missed the Zacks Consensus Estimate of $4.06. At the end of first-quarter 2019, adjusted net income was $253 million compared with $345 million recorded in the prior-year quarter.
During the reported quarter, revenues decreased 10% year over year to $5.2 billion, whereas the Zacks Consensus Estimate was pegged at $5.7 billion. Revenues were impacted by lower production on key Lear platforms, which were partly offset by the addition of new business.
Moreover, the company’s core operating earnings declined to $378 million from $491 million in first-quarter 2018.
Lear Corporation Price, Consensus and EPS Surprise
Lear Corporation Price, Consensus and EPS Surprise | Lear Corporation Quote
Segment Performances
In the reported quarter, net sales at the Seating segment were $3.9 billion compared with $4.3 billion in first-quarter 2018. The adjusted margin was 7.6% compared with 8.3% in the prior-year quarter.
Net sales at the E-Systems segment was $1.2 billion compared with $1.4 billion generated in the year-ago quarter. Additionally, adjusted margin was 11.3% compared with 14.1% in first-quarter 2018.
Financials
Lear had $1.2 billion of cash and cash equivalents as of Mar 30, 2019, down from $1.5 billion recorded on Dec 31, 2018. The company had long-term debt of $1.94 billion as of Mar 30, 2019, almost unchanged from the figure as of Dec 31, 2018.
At the end of first-quarter 2019, Lear’s net operating cash inflow was $51.6 million in comparison with $236.8 million as of Mar 31, 2018. During the period, its capital expenditure was $122.8 million, marking a decrease from $162.8 million recorded in the prior-year quarter.
Capital Deployment
During the reported quarter, Lear repurchased 804,270 shares for $118 million. As of the end of the fourth quarter, the company had remaining share repurchase authorization of $1.47 billion.
2019 Outlook
Lear reiterated its 2019 guidance. The company currently expects net sales of $20.9-$21.7 billion and adjusted net income of $1.08-$1.17 billion. Further, it projects capital spending of roughly $700 million compared with the last year’s capital expenditure of $677 million.
Zacks Rank & Stocks to Consider
Lear currently carries a Zacks Rank #3 (Hold). A few better-ranked stocks in the broader auto sector are Geely Automobile Holdings Ltd. (GELYY - Free Report) , PACCAR Inc. (PCAR - Free Report) and Fox Factory Holding Corp. (FOXF - Free Report) .
While Geely currently sports a Zacks Rank #1 (Strong Buy), PACCAR and Fox Factory carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Geely Automobile has an expected long-term growth rate of 7%. Share price of the company has increased 25.6% in the past three months.
PACCAR has an expected long-term growth rate of 8.4%. Over the past three months, shares of the company have gained 9.6%.
Fox Factory has an expected long-term growth rate of 5%. Shares of the company have gained 31.7% in the past three months.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.
This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.
See their latest picks free >>