Lear Corp Earnings Cheat Sheet: Double-Digit Revenue Growth Continues

Lear Corporation (NYSE:LEA) reported higher profit for the third quarter as revenue showed growth. Lear and its affiliates design and manufacture complete automotive seat systems and components as well as electrical distribution systems and electronic products.

Investing Insights: Here’s Why Chipotle’s Stock Keeps Winning.

Lear Earnings Cheat Sheet for the Third Quarter

Results: Net income for Lear Corporation rose to $100.7 million (95 cents per share) vs. $95.3 million (88 cents per share) in the same quarter a year earlier. This marks a rise of 5.7% from the year earlier quarter.

Revenue: Rose 22.7% to $3.46 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: LEA reported adjusted net income of $1.08 per share. By that measure, the company fell short of mean estimate of $1.14 per share. It beat the average revenue estimate of $3.24 billion.

Quoting Management: “Our positive momentum continued in the third quarter as our sales increased at a faster pace than industry production and we achieved our 9th consecutive quarter of improved earnings,” said Matt Simoncini, Lear’s president and chief executive officer. “We are continuing to invest in strengthening and growing our core businesses with an emphasis on increasing our component capabilities in emerging markets. Our strong financial position allows us to strengthen our competitive position while returning cash to our shareholders.”

Key Stats:

The company has enjoyed double-digit year-over-year percentage revenue growth for the past five quarters. Over that span, the company has averaged growth of 17.8%, with the biggest boost coming in the most recent quarter when revenue rose 22.7% from the year earlier quarter.

The company has now seen net income rise in three straight quarters. In the second quarter, net income rose 11.1% and in the first quarter, the figure rose more than twofold.

Gross margin shrank 0.3 percentage point to 8.1%. The contraction appeared to be driven by increased costs, which rose 23% from the year earlier quarter while revenue rose 22.7%.

The company fell short of forecasts after beating estimates in the previous two quarters. In the second quarter, it topped the mark by 27 cents, and in the first quarter, it was ahead by 32 cents.

Looking Forward: Analysts appear increasingly negative about the company’s results for the next quarter. The average estimate for the fourth quarter has moved down from $1.36 a share to $1.30 over the last ninety days. Over the past three months, the average estimate for the fiscal year has climbed from $5.32 per to share to $5.42.

Competitors to Watch: Johnson Controls, Inc. (NYSE:JCI), Visteon Corporation (NYSE:VC), Gentex Corporation (NASDAQ:GNTX), General Electric (NYSE:GE), United Technologies Corp. (NYSE:UTX), Honeywell Intl. Inc. (NYSE:HON).

Investing Insights: Here’s Why Chipotle’s Stock Keeps Winning.

(Source: Xignite Financials)