Lear (LEA) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue was $5.6 billion, down 3% year-over-year, but outperformed industry volume by 3 percentage points globally, with E-Systems up 5 points and Seating up 3 points.

• Net income rose to $136 million, with adjusted net income at $163 million; adjusted EPS was $2.89, up 1% year-over-year, supported by share repurchases.

• Share repurchases totaled $209 million in Q3, achieving the full-year $325 million target early; $43 million paid in dividends.

• Growth in China with new awards from BYD, Xiaomi, Seres (Seating), Dongfeng Group (E-Systems), and ComfortFlex module launches with Volvo and GM.

• Named a 2025 Automotive News PACE Award finalist and achieved top rankings in the J.D. Power 2024 U.S. Seat Quality and Satisfaction Study.

Financial highlights

• Q3 net sales were $5.6 billion, down from $5.8 billion in Q3 2023; core operating earnings were $257 million (4.6% margin); adjusted EPS was $2.89.

• Net income attributable to Lear was $136 million; adjusted net income was $162.8 million.

• Operating cash flow was $183 million, down from $404 million last year, mainly due to working capital timing.

• Free cash flow for Q3 was $51 million; cash and equivalents at quarter end were $764 million.

• Gross margin for Q3 2024 was 7.3%, slightly up from 7.2% in Q3 2023.

Outlook and guidance

• 2024 full-year net sales expected between $22.95 billion and $23.15 billion; core operating earnings forecast $1.04–$1.09 billion.

• Free cash flow guidance: $535–$585 million; capital spending: $575 million.

• Global industry production assumed down 4% for 2024, with key regions expected to decline year-over-year.

• Q4 production outlook is cautious, with significant declines expected in Europe (-19%), North America (-9%), and China (-7.6%).

• Company expects to incur ~$50 million in additional restructuring costs within the next twelve months.