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SOUTHFIELD - On Friday, Lear Corporation (NYSE:LEA), the automotive technology leader, reported second quarter earnings that fell short of analyst expectations, despite posting revenue that exceeded forecasts.
The company’s shares plunged 9.83% in pre-market trading after the earnings release.
The global automotive seating and electrical systems supplier reported second quarter earnings per share of $3.06, missing the analyst estimate of $3.26 by $0.20. Revenue came in at $6 billion, slightly above the consensus estimate of $5.89 billion and flat compared to the same period last year.
Core operating earnings declined to $292 million (4.8% of sales) from $302 million (5.0% of sales) in the second quarter of 2024, reflecting lower production on key Lear platforms, partially offset by positive operational performance and new business additions.
"Lear continued its momentum from the start of the year through the second quarter, with strong operating performance driving solid margins in both business segments," said Ray Scott, Lear’s President and CEO. "Our investments in automation and restructuring will extend our industry leadership in operational excellence and drive sustainable margin improvement."
The company restored its full-year 2025 guidance, projecting revenue between $22.47 billion and $23.07 billion, in line with the consensus estimate of $22.67 billion. Lear expects core operating earnings of $955 million to $1.095 billion for the year.
Despite operational challenges, Lear maintained its shareholder returns, repurchasing $25 million of shares and paying $41 million in dividends during the quarter. The company also secured several new business wins, including conquest programs with BMW (ETR:BMWG) and Ford, and new business with Chinese EV makers Leapmotor (HK:9863) and XPeng (NYSE:XPEV).
Global vehicle production was up 3% compared to a year ago, with North America down 3%, Europe down 2%, and China up 9%. However, production was flat on a Lear sales-weighted basis, contributing to the company’s financial performance challenges.
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