Lear Reports Favorable Second Quarter Results

Lear Corp. recently said net income for the second quarter increased sharply to $123.6 million, or $1.58 a share, compared with a loss of $6.4 million, or 10 cents a share, in the same period a year earlier. Lear's second-quarter performance easily beat the 91 cent per share profit that analysts had expected and shares of Lear stock were up $1.20 or 3.7 percent to $34.59 last week.

From Detroit Free Press

Lear’s second-quarter performance easily beat the 91 cent per share profit that analysts had expected and shares of Lear stock were up $1.20 or 3.7 percent to $34.59 last week.

The Southfield, MI, supplier of automotive seating systems and electronic products said sales for the three months ended June 30 were $4.16 billion, versus $4.81 billion during the year-ago period. Sales declined because Lear sold off a majority stake in its interiors business, which makes instrument clusters, to investor Wilbur Ross.

"The Lear team was able to deliver improved financial results as benefits from restructuring activities, ongoing cost and efficiency actions and new business globally more than offset lower production in North America," said Bob Rossiter, Lear chairman and chief executive officer in a statement. "Going forward, we plan to continue with our strategy of global restructuring and further sales diversification to improve our longer-term competitiveness."

The company improved its margins in its seating business, a segment where it has also won new contracts with Chinese automakers Chery Automobile Co. and Geely Automobile.

"The company’s impressive recent performance in seating raised our confidence in the effectiveness" of Lear’s turnaround plan, Lehman Brothers analyst Brian Johnson said in a note to investors.

Lear, in the midst of $300-million corporate restructuring, had been targeted by billionaire investor Carl Icahn for a takeover bid. Last month, shareholders rejected a management-backed $37.25 a share bid by Icahn’s American Real Estate Partners private equity firm to purchase Lear.

The company’s stock rose after shareholders rejected Icahn’s offer and then fell last week along with the rest of the market on concerns that it is becoming harder for corporations to borrow money.

"We believe there were benefits to the transaction," Rossiter said during a conference call with analysts. "What we also believe is the company as a stand-alone company today as it is structured … we feel very strongly, very positive about it."

Distributed by McClatchy-Tribune Information Services.