Lear Corporation (LEA - Free Report) reported second-quarter 2021 adjusted earnings of $2.45 per share, marginally surpassing the Zacks Consensus Estimate of $2.40. Higher-than-expected contribution from the E-Systems segment led to this outperformance. The reported earnings figure also turns around the loss of $4.14 per share witnessed in second-quarter 2020.
For the reported quarter, revenues surged 95% year over year to $4,760.7 million. The top line, however, lagged the Zacks Consensus Estimate of $4,803 million.
Segmental Performance
Sales in the Seating segment totaled $3,608.2 million for second-quarter 2021, jumping from the year-ago quarter’s $1,754.9 million. However, the metric missed the Zacks Consensus Estimate of $3,682 million. Adjusted segmental earnings came in at $262.2 million, reversing the loss of $102.1 million posted in the second quarter of 2020. However, the metric trailed the Zacks Consensus Estimate of $269 million. The segment recorded adjusted margins of 7.3% of sales.
Sales in the E-Systems segment summed $1,152.5 million, up 67.1% year over year. The figure also topped the consensus mark of $1,129 million. Adjusted segmental earnings amounted to $40.5 million, as against the loss of $91 million reported in the year-ago quarter. The metric topped the Zacks Consensus Estimate of $39 million. For the E-Systems segment, adjusted margin was 3.5% of sales.
Financial Position
The company had $1,401.7 million of cash and cash equivalents as of Jul 3, 2021 compared with the $1,775.5 million recorded in the corresponding period of 2020. It had a long-term debt of $2,301.3 million as of Jul 3, 2021, compared with the $2,302.7 million recorded in the year-ago quarter.
At the end of the second quarter, net cash provided by operating activities totaled $260.1 million compared with the $524.5 million of cash used in the year-ago period. For the reported period, its capital expenditure amounted to $140 million, up from the prior-year quarter’s $86.1 million. Free cash flow (FCF) came in at $120.1 million compared with the negative $610.6 million recorded in the corresponding period of 2020.
2021 Guidance Down
Amid the global semiconductor shortage and higher commodity costs, Lear has revised the full-year 2021 guidance downward. Full-year net sales are expected between $19.7 billion and $20.5 billion, lower than the earlier forecast of $20.3-$21.1 billion. Core operating earnings are forecast in the band of $920-$1,110 million, less than the prior outlook of $1,140-$1,310 million. Capital spending is anticipated to be $625 million. FCF is envisioned in the range of $350-$500 million compared with the previous outlook of $550-$700 million.
Lear — whose peers include Magna International (MGA - Free Report) , Adient PLC (ADNT - Free Report) and American Axle and Manufacturing (AXL - Free Report) — currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Lear Corporation (LEA - Free Report) reported second-quarter 2021 adjusted earnings of $2.45 per share, marginally surpassing the Zacks Consensus Estimate of $2.40. Higher-than-expected contribution from the E-Systems segment led to this outperformance. The reported earnings figure also turns around the loss of $4.14 per share witnessed in second-quarter 2020.
For the reported quarter, revenues surged 95% year over year to $4,760.7 million. The top line, however, lagged the Zacks Consensus Estimate of $4,803 million.
Segmental Performance
Sales in the Seating segment totaled $3,608.2 million for second-quarter 2021, jumping from the year-ago quarter’s $1,754.9 million. However, the metric missed the Zacks Consensus Estimate of $3,682 million. Adjusted segmental earnings came in at $262.2 million, reversing the loss of $102.1 million posted in the second quarter of 2020. However, the metric trailed the Zacks Consensus Estimate of $269 million. The segment recorded adjusted margins of 7.3% of sales.
Sales in the E-Systems segment summed $1,152.5 million, up 67.1% year over year. The figure also topped the consensus mark of $1,129 million. Adjusted segmental earnings amounted to $40.5 million, as against the loss of $91 million reported in the year-ago quarter. The metric topped the Zacks Consensus Estimate of $39 million. For the E-Systems segment, adjusted margin was 3.5% of sales.
Financial Position
The company had $1,401.7 million of cash and cash equivalents as of Jul 3, 2021 compared with the $1,775.5 million recorded in the corresponding period of 2020. It had a long-term debt of $2,301.3 million as of Jul 3, 2021, compared with the $2,302.7 million recorded in the year-ago quarter.
At the end of the second quarter, net cash provided by operating activities totaled $260.1 million compared with the $524.5 million of cash used in the year-ago period. For the reported period, its capital expenditure amounted to $140 million, up from the prior-year quarter’s $86.1 million. Free cash flow (FCF) came in at $120.1 million compared with the negative $610.6 million recorded in the corresponding period of 2020.
2021 Guidance Down
Amid the global semiconductor shortage and higher commodity costs, Lear has revised the full-year 2021 guidance downward. Full-year net sales are expected between $19.7 billion and $20.5 billion, lower than the earlier forecast of $20.3-$21.1 billion. Core operating earnings are forecast in the band of $920-$1,110 million, less than the prior outlook of $1,140-$1,310 million. Capital spending is anticipated to be $625 million. FCF is envisioned in the range of $350-$500 million compared with the previous outlook of $550-$700 million.
Lear — whose peers include Magna International (MGA - Free Report) , Adient PLC (ADNT - Free Report) and American Axle and Manufacturing (AXL - Free Report) — currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Free Report – The Bitcoin Profit Phenomenon
Zacks Investment Research has released a Special Report to help you pursue massive profits from the world’s first and largest decentralized form of money.
No guarantees for the future, but in the past three presidential election years, Bitcoin’s returns were as follows: 2012 +272.4%, 2016 +161.1%, and 2020 +302.8%.
Zacks predicts another significant surge. Click below for Bitcoin: A Tumultuous Yet Resilient History.
Download Now – Today It’s FREE >>
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