Lear’s net income in the quarter was US$305.8 million, up 23% from US$248.4 million in the first quarter of 2016. Core operating earnings was US$431.5 million in the period with a margin of 8.6%, up from 8.3% a year ago. Earnings per share was US$4.35 and adjusted earnings per share was US$4.27, up 26% year-on-year.
Sales in the quarter increased 7% to US$5 billion, but excluding the impact of foreign exchange sales were up 9%, with growth reported in all regions reflecting “the addition of new business and increased production volumes on key platforms in both of our product segments”. Sales for both of Lear’s segments were up 7%. Excluding the impact of foreign exchange, sales for the Seating and E-Systems segments were up 9% and 8%, respectively.
As reported by ILM, on February 6, 2017, Lear signed a definitive agreement to acquire the France headquartered Grupo Antolin’s seating business, comprised of just-in-time seat assembly, seat structures & mechanisms and seat covers. According to Lear, Antolin is well positioned among the largest European automakers, including Daimler, Peugeot Citroen, Renault Nissan and Volkswagen. Lear expects the transaction to close in the second quarter of 2017.
Since initiating the share repurchase program in early 2011, Lear says it has repurchased 42 million shares of its common stock for a total of US$3.2 billion at an average price of US$75.96 per share, representing a reduction of approximately 40% of total shares outstanding at the time the program began. “We have a record sales backlog that will provide continued profitable sales growth and superior shareholder returns. This year, we celebrate our 100th anniversary, and the Company has never been in a stronger competitive position. I have never been more optimistic about our future”, said Matt Simoncini, President and CEO, Lear, in a statement.
Sales in 2017 are expected to be approximately US$19.5 billion, and core operating earnings are expected to be about US$1.6 billion. Net cash provided by operating activities is estimated to be US$1.6 billion, and capital spending US$550 million, resulting in free cash flow in excess of US$1 billion.