Lear (LEA) Q2 2024 earnings summary

Executive summary

• Achieved record Q2 2024 revenue of $6.0 billion, with both Seating and E-Systems segments outgrowing the market by 2 and 7 percentage points, respectively.

• Adjusted EPS rose 8% year-over-year to $3.60, supported by higher net income and share repurchases.

• E-Systems delivered its eighth consecutive quarter of year-over-year margin improvement.

• Introduced ComfortFlex and ComfortMax Seat modular thermal comfort solutions, with validation underway at Ford and new awards with Geely Zeekr, Volvo, and Volkswagen/Audi.

• Completed acquisition of WIP Industrial Automation to enhance automation and AI capabilities.

Financial highlights

• Q2 2024 net sales were $6.0B, core operating earnings $302M, and adjusted EPS $3.60 (up 8% YoY).

• Free cash flow was $170 million, up from $159 million in 2023, with net cash from operating activities at $291 million.

• Gross margin for Q2 2024 was 7.5%, with net margin at 2.9%.

• Repurchased $60 million in shares and paid $44 million in dividends during Q2; $1.4 billion repurchase authorization remains.

• Cash and cash equivalents at quarter end were $950 million; total liquidity $3.0 billion.

Outlook and guidance

• 2024 revenue guidance set at $23.23–$23.67 billion, with core operating earnings of $1.03–$1.2 billion and adjusted EBITDA $1.67–$1.84 billion.

• Free cash flow guidance for 2024 is $485–$635 million; capital expenditures projected at ~$650 million.

• Guidance reflects lower global vehicle production assumptions (down 3% vs. 2023) and updated FX rates.

• Restructuring costs increased to $150 million; additional $57 million expected within twelve months.

• Free cash flow conversion expected to exceed 80%, enabling $325 million in share repurchases for 2024.