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Lear (LEA - Free Report) reported third-quarter 2022 adjusted earnings of $2.33 per share, surging around 340% year over year from 53 cents. The bottom line also surpassed the Zacks Consensus Estimate of $2.14 per share. Higher-than-expected sales and earnings across both business segments led to the outperformance.
In the reported quarter, revenues increased 23% year over year to $5,241 million. The top line also beat the Zacks Consensus Estimate of $5,134 million.
Lear Corporation Price, Consensus and EPS Surprise
Sales for the Seating segment totaled $3,888 million in the reported quarter, reflecting a 22.8% increase from the year-ago quarter and surpassing the Zacks Consensus Estimate of $3,862 million. Adjusted segmental earnings came in at $255 million, surging 77% from a year ago. The reported figure topped the consensus mark of $251 million. The segment recorded adjusted margins of 6.6% of sales, up from 4.5% in the previous-year quarter.
Sales in the E-Systems segment were $1,353 million, up 22.7% year over year. The figure also crossed the consensus mark of $1,321 million. Adjusted segmental earnings amounted to $53 million, more than doubling from the corresponding quarter of 2021. The metric also beat the consensus mark of $43.86 million. For the E-Systems segment, the adjusted margin was 3.9% of sales, up from 2.1% in the year-ago quarter.
Performance by Region
Sales in the North America region increased 27.6% year over year to $2,284.2 million in the quarter and topped the consensus mark of $2,119 million.
Sales in the South America region grew nearly 23% year over year to $225.3 million in the quarter. The metric was in line with the consensus mark.
Sales in the Europe and Africa region increased 19.2% year over year to $1,588.8 million in the quarter and topped the consensus mark of $1,436 million.
Sales in the Asia region rose 18.8% year over year to $1,143 million in the quarter but lagged the consensus mark of $1,248 million.
Financial Position
The company had $842.2 million of cash and cash equivalents at the quarter-end versus $1,318.3 million recorded as of Dec 31, 2021. Lear had long-term debt of $2,600.5 million at the quarter end, higher than a debt of $2,595.2 million as of 2021-end.
At the third quarter-end, net cash provided by operating activities totaled $252.1 million, a noticeable improvement from $4.4 million of cash outflow in the corresponding quarter of 2021. In the reported period, its capital expenditure amounted to $140.4 million, decreasing from $152.6 million. The company registered a free cash flow of $111.7 million in the quarter under review against a negative free cash flow of $157 million in the previous-year quarter.
During the quarter, LEA repurchased 187,192 shares of its common stock for a total of $25 million. At the end of the quarter, Lear had a remaining share repurchase authorization of nearly $1.3 billion. In the third quarter of 2022, Lear returned $71 million to investors via buybacks and dividends.
2022 Guidance Reiterated
Lear projects its full-year net sales in the band of $20.55-$21.05 billion. Core operating earnings are envisioned in the band of $815-$915 million. Operating cash flow is projected within $950-$1,075 million. Lear anticipates FCF in the band of $275-$375. Capital spending forecast is now within $675-$700 million. Adjusted EBITDA is envisioned within the range of $1,405-$1,505 million.
BorgWarnerInc. (BWA - Free Report) : BorgWarner reported adjusted earnings of $1.24 per share for third-quarter 2022, up from 80 cents recorded in the prior-year quarter. The bottom line also beat the Zacks Consensus Estimate of $1.02 per share. The automotive equipment supplier reported net sales of $4,060 million, outpacing the Zacks Consensus Estimate of $3,977 million. The top line also moved up 18.8% year over year.
For full-year 2022, the company anticipates net sales within $15.4-$15.7 billion, indicating year-over-year growth of 12-14%. Importantly, BorgWarner envisions electric vehicle revenues of around $850 million for 2022, doubling from 2021 levels. Adjusted operating margin is expected in the band of 10-12%. Adjusted net earnings are estimated to be within $4.25-$4.45 share. Free cash flow is projected in the band of $650-$750 million.
Allison TransmissionHoldings (ALSN - Free Report) : Allison posted third-quarter earnings of $1.45 a share, which topped the Zacks Consensus Estimate of $1.31. The bottom line increased 63% on a year-over-year basis. Quarterly revenues of $710 million grew 25% from the year-ago period and crossed the consensus mark of $691 million.
Allison modified its full-year 2022 guidance. It now estimates net sales in the band of $2,690-$2,740 million compared with the prior range of $2,650-$2,750 million. Net income is now expected in the band of $490-$510 million, up from the prior estimate of $450-$500 million, and adjusted EBITDA is now estimated within $915-$945 million compared with $885-$955 million previously. Adjusted free cash flow is now estimated within $460-$480 million compared with $420-$480 million projected previously. Its net cash provided by operating activities is expected to be within $620-$650 million, compared with $590-$660 million expected previously.
Autoliv Inc. (ALV - Free Report) : Autoliv reported third-quarter 2022 adjusted earnings of $1.23 per share, missing the Zacks Consensus Estimate of $1.37. The bottom line, nevertheless, shot up 68% on a year-over-year basis. The company reported net sales of $2,302 million for the quarter, which missed the Zacks Consensus Estimate of $2,344 million. The top line, however, soared 25% year over year.
The company forecasts full-year 2022 organic sales growth of around 15%, compared with 13-16% guided previously. Adjusted operating margin is now anticipated within the higher end of 6-7%. Operating cash flow expectations have been brought down to the band of $700-$750 million from $750-$850 million forecast earlier. The projection for capex, net, of sales, remains unchanged at around 5.5%.
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Lear (LEA) Q3 Earnings & Revenues Beat Estimates, Rise Y/Y
Lear (LEA - Free Report) reported third-quarter 2022 adjusted earnings of $2.33 per share, surging around 340% year over year from 53 cents. The bottom line also surpassed the Zacks Consensus Estimate of $2.14 per share. Higher-than-expected sales and earnings across both business segments led to the outperformance.
In the reported quarter, revenues increased 23% year over year to $5,241 million. The top line also beat the Zacks Consensus Estimate of $5,134 million.
Lear Corporation Price, Consensus and EPS Surprise
Lear Corporation price-consensus-eps-surprise-chart | Lear Corporation Quote
Segment Performance & Quarter Highlights
Sales for the Seating segment totaled $3,888 million in the reported quarter, reflecting a 22.8% increase from the year-ago quarter and surpassing the Zacks Consensus Estimate of $3,862 million. Adjusted segmental earnings came in at $255 million, surging 77% from a year ago. The reported figure topped the consensus mark of $251 million. The segment recorded adjusted margins of 6.6% of sales, up from 4.5% in the previous-year quarter.
Sales in the E-Systems segment were $1,353 million, up 22.7% year over year. The figure also crossed the consensus mark of $1,321 million. Adjusted segmental earnings amounted to $53 million, more than doubling from the corresponding quarter of 2021. The metric also beat the consensus mark of $43.86 million. For the E-Systems segment, the adjusted margin was 3.9% of sales, up from 2.1% in the year-ago quarter.
Performance by Region
Sales in the North America region increased 27.6% year over year to $2,284.2 million in the quarter and topped the consensus mark of $2,119 million.
Sales in the South America region grew nearly 23% year over year to $225.3 million in the quarter. The metric was in line with the consensus mark.
Sales in the Europe and Africa region increased 19.2% year over year to $1,588.8 million in the quarter and topped the consensus mark of $1,436 million.
Sales in the Asia region rose 18.8% year over year to $1,143 million in the quarter but lagged the consensus mark of $1,248 million.
Financial Position
The company had $842.2 million of cash and cash equivalents at the quarter-end versus $1,318.3 million recorded as of Dec 31, 2021. Lear had long-term debt of $2,600.5 million at the quarter end, higher than a debt of $2,595.2 million as of 2021-end.
At the third quarter-end, net cash provided by operating activities totaled $252.1 million, a noticeable improvement from $4.4 million of cash outflow in the corresponding quarter of 2021. In the reported period, its capital expenditure amounted to $140.4 million, decreasing from $152.6 million. The company registered a free cash flow of $111.7 million in the quarter under review against a negative free cash flow of $157 million in the previous-year quarter.
During the quarter, LEA repurchased 187,192 shares of its common stock for a total of $25 million. At the end of the quarter, Lear had a remaining share repurchase authorization of nearly $1.3 billion. In the third quarter of 2022, Lear returned $71 million to investors via buybacks and dividends.
2022 Guidance Reiterated
Lear projects its full-year net sales in the band of $20.55-$21.05 billion. Core operating earnings are envisioned in the band of $815-$915 million. Operating cash flow is projected within $950-$1,075 million. Lear anticipates FCF in the band of $275-$375. Capital spending forecast is now within $675-$700 million. Adjusted EBITDA is envisioned within the range of $1,405-$1,505 million.
Lear currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.
Peer Releases
BorgWarner Inc. (BWA - Free Report) : BorgWarner reported adjusted earnings of $1.24 per share for third-quarter 2022, up from 80 cents recorded in the prior-year quarter. The bottom line also beat the Zacks Consensus Estimate of $1.02 per share. The automotive equipment supplier reported net sales of $4,060 million, outpacing the Zacks Consensus Estimate of $3,977 million. The top line also moved up 18.8% year over year.
For full-year 2022, the company anticipates net sales within $15.4-$15.7 billion, indicating year-over-year growth of 12-14%. Importantly, BorgWarner envisions electric vehicle revenues of around $850 million for 2022, doubling from 2021 levels. Adjusted operating margin is expected in the band of 10-12%. Adjusted net earnings are estimated to be within $4.25-$4.45 share. Free cash flow is projected in the band of $650-$750 million.
Allison Transmission Holdings (ALSN - Free Report) : Allison posted third-quarter earnings of $1.45 a share, which topped the Zacks Consensus Estimate of $1.31. The bottom line increased 63% on a year-over-year basis. Quarterly revenues of $710 million grew 25% from the year-ago period and crossed the consensus mark of $691 million.
Allison modified its full-year 2022 guidance. It now estimates net sales in the band of $2,690-$2,740 million compared with the prior range of $2,650-$2,750 million. Net income is now expected in the band of $490-$510 million, up from the prior estimate of $450-$500 million, and adjusted EBITDA is now estimated within $915-$945 million compared with $885-$955 million previously. Adjusted free cash flow is now estimated within $460-$480 million compared with $420-$480 million projected previously. Its net cash provided by operating activities is expected to be within $620-$650 million, compared with $590-$660 million expected previously.
Autoliv Inc. (ALV - Free Report) : Autoliv reported third-quarter 2022 adjusted earnings of $1.23 per share, missing the Zacks Consensus Estimate of $1.37. The bottom line, nevertheless, shot up 68% on a year-over-year basis. The company reported net sales of $2,302 million for the quarter, which missed the Zacks Consensus Estimate of $2,344 million. The top line, however, soared 25% year over year.
The company forecasts full-year 2022 organic sales growth of around 15%, compared with 13-16% guided previously. Adjusted operating margin is now anticipated within the higher end of 6-7%. Operating cash flow expectations have been brought down to the band of $700-$750 million from $750-$850 million forecast earlier. The projection for capex, net, of sales, remains unchanged at around 5.5%.