Lear Corp. has reported record results for the first quarter 2018.

In the first quarter of 2018, sales were $5.7 billion, an increase of 15 percent year-over-year. Excluding the impact of foreign exchange, sales were up 8 percent. This increase reflects the addition of new business in both product segments and the acquisition of Grupo Antolin‘s seating business, partially offset by lower production volumes on key Lear platforms.

Sales for Lear’s Seating and E-Systems segments were up 12 percent and 24 percent, respectively. Excluding the impact of foreign exchange, sales for the Seating and E-Systems segments were up 6 percent and 15 percent, respectively.

Core operating earnings were up $59 million to $491 million, or 8.6 percent of sales, primarily reflecting the increase in sales. In the Seating segment, margins and adjusted margins were 7.8 percent and 8.3 percent of sales, respectively. In the E-Systems segment, margins and adjusted margins were 13.6 percent and 14.1 percent of sales, respectively.

Earnings per share were $5.16. Adjusted earnings per share were up 19 percent to $5.10 per share, reflecting improved operating earnings, a lower tax rate and a reduced share count.

“In the first quarter, we again delivered record financial results and accelerated our sales growth,” said Ray Scott, Lear’s president and CEO. “We are launching many new programs this year with added content and opportunities for profitable product mix improvement. In Seating, we have 145 launches, 70 percent of which are on high-content crossovers, SUVs and pickups. In E-Systems, we have 160 launches, including the industry’s most sophisticated connected gateway module. With our unique product capabilities in Seating and E-Systems and the continued convergence of the two segments, we are extremely well-positioned for future growth. In addition to our record backlog of awarded programs, this year we are quoting $1 billion in annualized new business related to the trends of electrification and connectivity alone. Our top priority is to capitalize on the significant growth opportunities in front of us while continuing to maintain our operational excellence, generate strong cash flow and deliver superior returns to our shareholders.”

Increased Share Repurchase Authorization and Dividend

On Feb. 13, Lear’s board of directors authorized an increase in Lear’s share repurchase authorization and extended the term to Dec. 31, 2020, bringing the total value of shares that may be repurchased to $1.5 billion. In addition, the board increased Lear’s quarterly cash dividend by 40 percent from 50 cents per share to 70 cents per share.

During the first quarter of 2018, we repurchased approximately 829,000 shares of our common stock for a total of $155 million. As of the end of the first quarter, we had a remaining share repurchase authorization of $1.35 billion, which reflects approximately 10 percent of our total market capitalization at current market prices.

Since initiating the share repurchase program in early 2011, we have repurchased 44.9 million shares of our common stock for a total of $3.7 billion at an average price of $81.72 per share. This represents a reduction of approximately 43 percent of our shares outstanding at the time that we began the program.

Full Year 2018 Financial Outlook

Lear is increasing its full year 2018 financial outlook for sales and earnings based on our strong first quarter performance and outlook for the remainder of the year.

Sales in 2018 are now expected to be in the range of $21.8 billion to $22.0 billion, up $400 million from the prior outlook. The increase in sales reflects the strengthening of foreign currencies compared to the U.S. dollar, as well as higher production on key Lear programs. Core operating earnings are now expected to be in the range of $1,790 million to $1,810 million, up approximately $40 million from the prior outlook.

Pretax operational restructuring costs are estimated to be $70 million, capital expenditures are expected to be $660 million, and depreciation and amortization expense is estimated to be $500 million.