Lear (LEA) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue was $5.6 billion, down 7% year-over-year, with core operating earnings of $270 million and operating margin of 4.9%, near the 5% target, despite lower production volumes and FX headwinds; net income was $80.7 million, adjusted EPS $3.12.

• Operating margins improved year-over-year in both Seating and E-Systems, driven by efficiency, restructuring, and operational excellence initiatives.

• Significant new business wins in both segments, including major awards with Ford, BMW, Hyundai, BYD, FAW, XPeng, Volvo, and Chinese automakers.

• Repurchased $25 million in shares and paid $43 million in dividends; $1.1 billion remains authorized for repurchases.

• Withdrew full-year 2025 guidance due to industry uncertainty from tariffs, production volatility, and trade policy negotiations, but remains confident in operational improvement targets.

Financial highlights

• Net sales declined 7% year-over-year to $5.6 billion, primarily due to lower volumes, FX, and divestitures; core operating earnings were $270 million, adjusted EPS $3.12, and operating cash flow was a use of $128 million.

• Core operating margin increased to 4.9% from 4.7% year-over-year; gross margin was 6.5% vs. 6.6% prior year.

• Net income fell to $80.7 million from $109.6 million; adjusted net income dropped to $169.3 million from $183.2 million.

• Free cash flow was $(232) million, impacted by timing and higher restructuring costs.

• Repurchased $25 million in shares; share repurchase program temporarily paused.

Outlook and guidance

• Not reaffirming 2025 full-year outlook due to uncertainty from tariffs, production forecasts, and trade policy; will provide updates as visibility improves.

• Confident in delivering operating performance improvements and net performance targets for both segments.

• Additional restructuring costs of $42 million expected over the next twelve months.