SOUTHFIELD, MI — Lear Corp. has reported financial results for the third quarter of 2007. The company also updated its outlook for the full year of 2007 and provided a preliminary outlook for 2008.

For the third quarter of 2007, Lear reported net sales of $3.6 billion and pretax income of $60.1 million, including restructuring costs of $37.3 million and other special items of $8 million. For the third quarter of 2006, Lear reported net sales of $4.1 billion and a pretax loss of $65.9 million, including restructuring costs and other special items of $46.1 million.

Income before interest, other expense, income taxes, restructuring costs and other special items (core operating earnings) was $170.4 million for the third quarter of 2007. This compares with net sales of $3.3 billion and core operating earnings of $100.1 million, excluding the divested Interior business, for the third quarter of 2006. A reconciliation of core operating earnings to pretax income (loss) as determined by generally accepted accounting principles is provided in the supplemental data pages.

"Our financial performance continued to improve in the third quarter as the benefits from on-going operational efficiencies, our global restructuring initiative and new business favorably impacted our bottom line," said Bob Rossiter, Lear chairman, CEO and president. "Our focus going forward is to continue to provide superior quality products and services, while we work to further strengthen and profitably grow our core seating, electrical distribution and electronic businesses."

Net sales in core businesses were up from the prior year, primarily reflecting the addition of new business outside of North America and favorable foreign exchange, offset in part by unfavorable platform mix in North America. Operating performance improved from the year-earlier results, reflecting the company’s cost improvement actions and restructuring initiative, as well as benefits from new business outside of North America.

In the seating segment, operating margins improved, reflecting favorable cost performance from restructuring and ongoing efficiency actions, selective vertical integration and the benefit of new business globally. In the electrical and electronic segment, operating margins declined, reflecting unfavorable net pricing and the roll-off of several key programs in North America.

Lear reported net income of $41 million, or 52 cents per share, for the third quarter of 2007. This compares with a net loss of $74 million, or $1.10 per share, for the third quarter of 2006.

Free cash flow in the third quarter of 2007 was $90.8 million as compared to negative $48.2 million in the third quarter of 2006. The improvement reflects primarily the divestiture of the Interior business and an improvement in core operating earnings. (Net cash provided by (used in) operating activities was $62 million in the third quarter of 2007 as compared to $(8.1) million in the third quarter of 2006.

Full-Year 2007 Outlook

Summarized below is the revised 2007 financial outlook for Lear’s core businesses. The outlook excludes results for the divested Interior business for the full year. On this basis, Lear expects 2007 net sales of approximately $15 billion. This is unchanged from the prior outlook. Lear now anticipates 2007 core operating earnings in the range of $680 million. This is up from the last full-year outlook, reflecting lower production risk and more favorable operating performance.

Restructuring costs in 2007 are estimated to be about $125 million.

Interest expense is estimated to be approximately $200 million. Pretax income before restructuring costs and other special items is estimated in the range of $430 million. Tax expense is expected to be approximately $135 million, depending on the mix of earnings by country.

Capital spending in 2007 is estimated at approximately $200 million, down $35 million from the prior outlook, reflecting primarily program timing and spending efficiencies. Depreciation and amortization expense is estimated at about $300 million. Free cash flow is expected to be positive at about $350 million for the year. This is up from the prior outlook, reflecting higher earnings and lower capital spending.

Key assumptions underlying Lear’s full-year 2007 financial outlook include expectations for industry vehicle production of approximately 15 million units in North America and 19.7 million units in Europe. In addition, we are assuming an exchange rate of $1.35/Euro.

Preliminary 2008 Outlook

For its preliminary financial outlook for 2008 Lear said it expects industry vehicle production in North America to be generally in-line with the company’s 2007 outlook and in Europe to be up slightly from its 2007 outlook. In North America, Lear is forecasting moderately unfavorable platform mix, reflecting lower production of high-content full-size pick-up trucks and large SUVs. The company is also assuming an exchange rate of $1.40/Euro. Based on these assumptions, the company forecasts 2008 net sales and core operating earnings, excluding restructuring-related costs, roughly in line with its 2007 outlook.

For more information about Lear, go to: http://www.lear.com.