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Lear Earnings Slid 19% Despite 8% Sales Gain
Lear Corp. net profit dropped to $109 million in the first quarter of this year from $134 million in the same period of 2012.
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Lear Corp. net profit dropped to $109 million in the first quarter of this year from $134 million in the same period of 2012.
Quarterly revenue grew to $3.9 billion from $3.6 billion a year earlier. Content per vehicle rose 8% to $379 in North American and 10% to $311 in Europe and Africa.
The company says earnings were eroded by restructuring costs, the shrinking European car market, program changeovers and the costs of expanding in South America.
Lear's seating unit boosted revenue 3% to $2.9 billion. Income fell 13% to $164 million, or 5.6% of sales.
Revenue jumped 25% to $1 billion at the company's electrical systems business. Profit surged two-thirds to $90 million, an 8.7% return on sales.
Lear also announced it will buy back $800 million of its stock next week. The move is part of the accelerated repurchase program the company promised earlier this month under pressure from activist shareholders Marcato Capital Management LLC and Oskie Capital Management LLC.
Lear bought $200 million of its shares in the first quarter. Under the terms of its agreement with Marcato and Oskie, the company will launch a new two-year, $750 million share buyback after next week.
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