- Lear Corp (NYSE:LEA) reported a third-quarter FY21 sales decline of 13% year-on-year, to $4.27 billion, missing the analyst consensus of $4.37 billion.
- Global vehicle production decreased 19% Y/Y with North America down 25%, Europe down 28%, and China down 16%.
- For the second straight quarter, industry volumes were significantly impacted by semiconductor shortages, the company noted.
- Selling, general and administrative expenses rose 10.6% Y/Y to $163.3 million.
- Core operating income for the quarter declined 70% to $98 million, with a margin of 2.3%.
- The company held $1.1 billion in cash and equivalents as of October 2, 2021. Cash provided by operating activities for the nine months totaled $503.2 million.
- Adjusted EPS of $0.53 missed the analyst consensus of $0.71.
- Outlook: Lear has cut the FY21 sales outlook to $18.8 billion – $19.2 billion (prior view $19.70 billion – $20.50 billion) versus the consensus of $19.36 billion.
- The company has also cut FY21 adjusted EBITDA to $1.31 billion – $1.41 billion (prior view $1.48 billion – $1.67 billion).
- Lear’s reduced outlook reflects the impact of semiconductor and other component shortages that continue to impact industry volumes.
- Price Action: LEA shares are trading higher by 0.57% at $177.27 on the last check Tuesday.
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Business Outlook
During the first quarter of 2022, the overall economics in China was impacted by the regional lockdowns. Under the current zero COVID policy, the Company believes that rolling lockdowns, simultaneously
