Lear (LEA) Q1 2026 earnings summary

Executive summary

• Q1 2026 revenue grew 5% year-over-year to $5.8 billion, with strong gains in both Seating and E-Systems, driven by higher production volumes, favorable FX, and major new business wins, especially with GM and Chinese automakers.

• Adjusted EPS reached $3.87, up 24% year-over-year and the highest since Q1 2019, supported by earnings growth and accelerated share repurchases.

• Net income attributable to shareholders was $172 million ($3.34 per diluted share), more than doubling year-over-year.

• Free cash flow improved by $205 million year-over-year, reflecting strong operations and working capital management.

• Continued investment in automation, digital transformation, and strategic acquisitions to enhance operational efficiency and support rapid program launches.

Financial highlights

• Net sales: $5,822.8 million in Q1 2026, up from $5,560.3 million in Q1 2025.

• Core operating earnings rose to $297 million (5.1% margin), up from $270 million (4.9%).

• Adjusted EPS: $3.87, up from $3.12 a year ago.

• Operating cash flow improved to $98 million from a use of $128 million last year.

• Free cash flow improved to $(26.5) million from $(231.7) million year-over-year.

Outlook and guidance

• Full-year 2026 net sales guidance: $23.2–$24.0 billion, with core operating earnings of $1.03–$1.2 billion and adjusted EBITDA of $1.65–$1.82 billion.

• Free cash flow guidance of $550–$650 million; capital expenditures projected at $660 million.

• Guidance maintained despite strong Q1 and favorable Q2 trends, due to macroeconomic and geopolitical uncertainties and expected 2% industry production decline.

• Margin expansion targets: 40 basis points for Seating, 80 basis points for E-Systems.

• Outlook excludes potential future tariff changes or major production disruptions.