Lear Corp (LEA - Free Report) reported first-quarter 2023 adjusted earnings of $2.78 per share, which surged from $1.80 recorded in the year-ago quarter. The bottom line also surpassed the Zacks Consensus Estimate of $2.55 per share. Higher-than-expected contribution from the Seating segment led to the outperformance. In the reported quarter, revenues increased 12% year over year to $5,845.5 million. The top line also beat the Zacks Consensus Estimate of $5,505 million.
Lear currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Segment Performance
Sales of the Seating segment totaled $4,453 million in the reported quarter, reflecting a 13.8% increase from the year-ago quarter and surpassing the Zacks Consensus Estimate of $3,931 million. Adjusted segmental earnings came in at $300.4 million, up 37.9% from a year ago. The reported figure topped the consensus mark of $243 million. The segment recorded adjusted margins of 6.7% of sales, up from 5.6% in the previous-year quarter.
Sales in the E-Systems segment were $1,392.5 million, up 7.4% year over year. The figure also topped the consensus mark of $1,311 million. Adjusted segmental earnings amounted to $48.90 million, up from $41.90 in the corresponding quarter of 2022. The metric, however, lagged the consensus mark of $52 million. For the E-Systems segment, the adjusted margin was 3.5% of sales, up from 3.2% in the year-ago quarter.
Performance by Region
Sales in the North America region increased 8.3% year over year to $2,380 million in the quarter and topped the consensus mark of $2,231 million.
Sales in the South America region grew nearly 13.7% year over year to $215 million in the quarter. The metric lagged the consensus mark of $217 million.
Sales in the Europe and Africa region increased 24.5% year over year to $2,231 million in the quarter, topping the consensus mark of $1,718 million.
Sales in the Asia region fell 1% year over year to $1,019.5 million in the quarter, which also lagged the consensus mark of $1,054 million.
Financial Position
The company had $898.5 million in cash and cash equivalents at the quarter’s end versus $1,114.9 million recorded as of Dec 31, 2022. Lear had long-term debt of $2,591.6 million at the quarter end compared with a debt of $2,591.2 million as of 2022-end.
At the first quarter-end, net cash used in operating activities totaled $36 million, a noticeable decline from the $221 million cash inflow in the corresponding quarter of 2022. In the reported period, its capital expenditure amounted to $111.8 million, down from $130.3 million. The company registered a negative free cash flow of $147 million in the quarter under review compared with an FCF of $90 million in the previous-year quarter.
During the quarter, LEA repurchased 182,902 shares of its common stock for a total of $25.1 million. At the end of the quarter, Lear had a remaining share repurchase authorization of nearly $1.2 billion. In the first quarter of 2023, Lear returned $72 million to investors via buybacks and dividends.
2023 Guidance Reiterated
Lear projects its full-year net sales in the band of $21,200-$22,200 million, up from $20,891 million recorded in 2022. Core operating earnings are envisioned in the range of $875-$1,075 million, implying an uptick from $871 generated in 2022. Operating cash flow is projected within $1,075-$1,225 million. Lear anticipates FCF in the band of $375-$525 million. Capital spending is forecast to be $700 million. Adjusted EBITDA is envisioned within the range of $1,475-$1,675 million.
Key Releases From the Auto Space
Tesla (TSLA - Free Report) reported first-quarter 2023 earnings of 85 cents per share, down from the year-ago figure of $1.07 but outpaced the Zacks Consensus Estimate of 83 cents. This marked an earnings beat for the electric vehicle behemoth for the ninth time in a row. Higher-than-expected revenues from its Energy Generation/Storage and Services/Other segments resulted in this outperformance.
Total revenues came in at $23,329 million, witnessing year-over-year growth of 24%. However, the top line missed the consensus mark of $23,472 million. Tesla reported an overall gross margin of 19.3% for the reported quarter. The operating margin came in at 11.4%. Management stuck to its target of around 50% growth in deliveries in the foreseeable future. For 2023, it expects deliveries to reach 1.8 million units.
General Motors (GM - Free Report) reported first-quarter 2023 adjusted earnings of $2.21 per share, surpassing the Zacks Consensus Estimate of $1.64. Higher-than-expected operating profits from GMNA, GMI and Financial segments led to the outperformance. The bottom line also rose from the year-ago quarter’s earnings of $2.09 per share.
Revenues of $39,985 million beat the Zacks Consensus Estimate of $38,677.9 million and increased from $35,979 million recorded in the year-ago period. However, the company recorded an adjusted EBIT of $3,803 million, lower than $4,044 million in the prior-year quarter. The automaker’s share in the GM market was 8.6% in the reported quarter, down from the year-ago quarter’s 9%.
PACCAR’s (PCAR - Free Report) earnings of $2.25 per share for first-quarter 2023 beat the Zacks Consensus Estimate of $1.82 and rocketed 95.6% from the year-ago figure. Higher-than-expected pretax income from Trucks, Parts and Financial Services segments resulted in the outperformance. Consolidated revenues (including trucks and financial services) came in at $8,473.3 billion, up from $6,472.6 million recorded in the corresponding quarter of 2022.
PACCAR’s cash and marketable debt securities amounted to $5,922.2 million as of Mar 31, 2023, compared with $6,158.9 million on Dec 31, 2022. The company paid cash dividends of 25 cents per share during the reported quarter. Capex and R&D expenses for 2023 are envisioned in the band of $600-$650 million and $380-$420 million, respectively.
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Lear Corp (LEA - Free Report) reported first-quarter 2023 adjusted earnings of $2.78 per share, which surged from $1.80 recorded in the year-ago quarter. The bottom line also surpassed the Zacks Consensus Estimate of $2.55 per share. Higher-than-expected contribution from the Seating segment led to the outperformance. In the reported quarter, revenues increased 12% year over year to $5,845.5 million. The top line also beat the Zacks Consensus Estimate of $5,505 million.
Lear currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Segment Performance
Sales of the Seating segment totaled $4,453 million in the reported quarter, reflecting a 13.8% increase from the year-ago quarter and surpassing the Zacks Consensus Estimate of $3,931 million. Adjusted segmental earnings came in at $300.4 million, up 37.9% from a year ago. The reported figure topped the consensus mark of $243 million. The segment recorded adjusted margins of 6.7% of sales, up from 5.6% in the previous-year quarter.
Sales in the E-Systems segment were $1,392.5 million, up 7.4% year over year. The figure also topped the consensus mark of $1,311 million. Adjusted segmental earnings amounted to $48.90 million, up from $41.90 in the corresponding quarter of 2022. The metric, however, lagged the consensus mark of $52 million. For the E-Systems segment, the adjusted margin was 3.5% of sales, up from 3.2% in the year-ago quarter.
Performance by Region
Sales in the North America region increased 8.3% year over year to $2,380 million in the quarter and topped the consensus mark of $2,231 million.
Sales in the South America region grew nearly 13.7% year over year to $215 million in the quarter. The metric lagged the consensus mark of $217 million.
Sales in the Europe and Africa region increased 24.5% year over year to $2,231 million in the quarter, topping the consensus mark of $1,718 million.
Sales in the Asia region fell 1% year over year to $1,019.5 million in the quarter, which also lagged the consensus mark of $1,054 million.
Financial Position
The company had $898.5 million in cash and cash equivalents at the quarter’s end versus $1,114.9 million recorded as of Dec 31, 2022. Lear had long-term debt of $2,591.6 million at the quarter end compared with a debt of $2,591.2 million as of 2022-end.
At the first quarter-end, net cash used in operating activities totaled $36 million, a noticeable decline from the $221 million cash inflow in the corresponding quarter of 2022. In the reported period, its capital expenditure amounted to $111.8 million, down from $130.3 million. The company registered a negative free cash flow of $147 million in the quarter under review compared with an FCF of $90 million in the previous-year quarter.
During the quarter, LEA repurchased 182,902 shares of its common stock for a total of $25.1 million. At the end of the quarter, Lear had a remaining share repurchase authorization of nearly $1.2 billion. In the first quarter of 2023, Lear returned $72 million to investors via buybacks and dividends.
2023 Guidance Reiterated
Lear projects its full-year net sales in the band of $21,200-$22,200 million, up from $20,891 million recorded in 2022. Core operating earnings are envisioned in the range of $875-$1,075 million, implying an uptick from $871 generated in 2022. Operating cash flow is projected within $1,075-$1,225 million. Lear anticipates FCF in the band of $375-$525 million. Capital spending is forecast to be $700 million. Adjusted EBITDA is envisioned within the range of $1,475-$1,675 million.
Key Releases From the Auto Space
Tesla (TSLA - Free Report) reported first-quarter 2023 earnings of 85 cents per share, down from the year-ago figure of $1.07 but outpaced the Zacks Consensus Estimate of 83 cents. This marked an earnings beat for the electric vehicle behemoth for the ninth time in a row. Higher-than-expected revenues from its Energy Generation/Storage and Services/Other segments resulted in this outperformance.
Total revenues came in at $23,329 million, witnessing year-over-year growth of 24%. However, the top line missed the consensus mark of $23,472 million. Tesla reported an overall gross margin of 19.3% for the reported quarter. The operating margin came in at 11.4%. Management stuck to its target of around 50% growth in deliveries in the foreseeable future. For 2023, it expects deliveries to reach 1.8 million units.
General Motors (GM - Free Report) reported first-quarter 2023 adjusted earnings of $2.21 per share, surpassing the Zacks Consensus Estimate of $1.64. Higher-than-expected operating profits from GMNA, GMI and Financial segments led to the outperformance. The bottom line also rose from the year-ago quarter’s earnings of $2.09 per share.
Revenues of $39,985 million beat the Zacks Consensus Estimate of $38,677.9 million and increased from $35,979 million recorded in the year-ago period. However, the company recorded an adjusted EBIT of $3,803 million, lower than $4,044 million in the prior-year quarter. The automaker’s share in the GM market was 8.6% in the reported quarter, down from the year-ago quarter’s 9%.
PACCAR’s (PCAR - Free Report) earnings of $2.25 per share for first-quarter 2023 beat the Zacks Consensus Estimate of $1.82 and rocketed 95.6% from the year-ago figure. Higher-than-expected pretax income from Trucks, Parts and Financial Services segments resulted in the outperformance. Consolidated revenues (including trucks and financial services) came in at $8,473.3 billion, up from $6,472.6 million recorded in the corresponding quarter of 2022.
PACCAR’s cash and marketable debt securities amounted to $5,922.2 million as of Mar 31, 2023, compared with $6,158.9 million on Dec 31, 2022. The company paid cash dividends of 25 cents per share during the reported quarter. Capex and R&D expenses for 2023 are envisioned in the band of $600-$650 million and $380-$420 million, respectively.
Free Report Reveals How You Could Profit from the Growing Electric Vehicle Industry
Globally, electric car sales continue their remarkable growth even after breaking records in 2021. High gas prices have fueled his demand, but so has evolving EV comfort, features and technology. So, the fervor for EVs will be around long after gas prices normalize. Not only are manufacturers seeing record-high profits, but producers of EV-related technology are raking in the dough as well. Do you know how to cash in? If not, we have the perfect report for you – and it’s FREE! Today, don't miss your chance to download Zacks' top 5 stocks for the electric vehicle revolution at no cost and with no obligation.
>>Send me my free report on the top 5 EV stocks<<
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