Shares of Lear Corp. LEA shares have increased over 3% since the company released its fourth-quarter 2024 results on Feb. 6, before the opening bell. The company reported adjusted earnings per share of $2.94, which beat the Zacks Consensus Estimate of $2.59, thanks to higher-than-expected revenues across both segments. The bottom line, however, decreased from $3.03 reported in the year-ago quarter. 

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In the reported quarter, revenues decreased 2.16% year over year to $5.72 billion but surpassed the Zacks Consensus Estimate of $5.51 billion.

Segmental Performance

Sales of the Seating segment totaled $4.19 billion in the reported quarter, down from $4.34 billion generated in the year-ago quarter but surpassed the Zacks Consensus Estimate by 2.22%. Adjusted segment earnings amounted to $257 million, down from $293.8 million recorded in the year-ago quarter but beat the Zacks Consensus Estimate by 1.56%. The segment recorded adjusted margins of 6.1% of sales, down from 6.8% recorded in the previous year’s quarter.

Sales of the E-Systems segment totaled $1.53 billion, which rose 2.04% year over year and beat the Zacks Consensus Estimate by 6.29%. Adjusted segmental earnings amounted to $76.7 million, down from $84 million in the corresponding quarter of 2023. The figure lagged the Zacks Consensus Estimate by 2.59%. For the E-Systems segment, the adjusted margin was 5% of sales, down from 5.6% in the year-ago quarter.

Performance by Region

Sales in the North America region increased 1.98% year over year to $2.32 billion in the quarter under review and beat the Zacks Consensus Estimate by 1.34%.

Sales in the Europe and Africa region fell 8.89% year over year to $1.98 billion, beating the Zacks Consensus Estimate by 6.76%.

Sales in the Asia region totaled $1.2 billion in the quarter, which increased 2.5% year over year and beat the Zacks Consensus Estimate by 4.47%.

Sales in the South America region totaled $213.5 million in the quarter, down from $221.4 million generated in the year-ago period and missing the Zacks Consensus Estimate by 11.05%.

Financial Position

The company had $1.05 billion in cash and cash equivalents as of Dec. 31, 2024, compared with $1.2 billion as of Dec. 31, 2023. Long-term debt was $2.73 billion as of Dec. 31, 2024, compared with $2.74 billion at the end of 2023.

During the quarter under discussion, net cash provided by operating activities totaled $680.8 million. In the reported period, capital expenditure amounted to $192.1 million. The company registered a free cash flow (FCF) of $488.7 million in the quarter.

During the quarter, LEA repurchased 1,009,079 shares of its common stock for a total of $101 million. At the end of the quarter, Lear had a remaining share repurchase authorization of nearly $1.1 billion.

LEA’s 2025 Guidance

Lear projects its full-year 2025 net sales in the band of $21.88-$22.88 billion, which at its midpoint indicates a decrease of 4% compared to 2024. Excluding the impact of foreign exchange, commodities, acquisitions and divestitures, LEA expects revenues to be down 2%.

Core operating earnings are anticipated to be in the range of $915 million to $1.175 billion, implying a year-over-year decrease of 5% at the midpoint.

Operating cash flow is projected to be between $1.06 billion and $1.26 billion. Lear anticipates FCF to be in the band of $430-$630 million. Capital spending is expected to be approximately $625 million. Adjusted EBITDA is expected to be between $1.54 billion and $1.8 billion.

Lear’s Zacks Rank & Key Picks

LEA currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the auto space are General Motors GM, Garrett Motion GTX and Yamaha Motor Co. YMHAY, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for GM’s 2025 and 2026 EPS has moved north 5.58% and 7.91%, respectively, over the past 30 days.

The Zacks Consensus Estimate for GTX’s 2025 EPS has moved up a cent over the past 30 days.

The Zacks Consensus Estimate for YMHAY’s 2025 EPS has moved up a cent over the past 60 days.

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