Simoncini: “We are converting our earnings into cash at a high level.”
DETROIT — Seating and electronics supplier Lear Corp. reported a 38 percent uptick in third-quarter net income to $295 million as sales hit record levels following a key acquisition.
Revenue rose 10 percent to $5 billion.
“The investments that we have made to improve our cost structure and product capabilities will continue to drive market share gains and increasing earnings,” CEO Matt Simoncini said in a statement. “We are converting our earnings into cash at a high level, which is allowing us to fund future growth and deliver superior shareholder returns.”
The company attributes the sales gain to new business in both the seating and electronics segments and its $307 million purchase of Grupo Antolin’s seating unit earlier this year. North America, the supplier’s biggest market, saw a 2 percent dip, falling from $1.86 billion to $1.82 billion. The decline was offset by gains in all other markets — Europe and Africa climbed 25 percent, Asia increased 5.7 percent and South America advanced 27 percent.
Core operating earnings reached $408 million, up 12 percent from third quarter of last year.
Lear’s seating segment sales rose 10 percent to $3.9 billion, and sales in the electronics segment jumped 10 percent to $1.1 billion.
Content per vehicle in North America increased to $456, vs. $428 in 2016, and increased in Europe and Africa to $393, vs. $336 the previous year.
Lear raised its 2017 revenue outlook by $400 million to $20.4 billion, with expected gains in operating earnings. The improved forecast is based on an expected 4 percent decline in North America vehicle production to 17.2 million units; a 3 percent increase in Europe and Africa; and a 1 percent increase in China.
Earnings per share rose 33 percent to $3.96, beating analysts’ consensus estimate of $3.74.
Lear shares were down 1.3 percent to $172.46 at 2:27 p.m. Eastern time.