Lear Corporation (LEA) Bundle
A Brief History of Lear Corporation
Founded in 1917, Lear Corporation has evolved into a leading global supplier of automotive seating and electrical systems. Initially started as a manufacturer of automotive seat covers, the company expanded its operations throughout the decades, establishing a strong presence in both the seating and E-Systems segments.
Company Overview (2024)
As of 2024, Lear Corporation operates through two primary segments: Seating and E-Systems. The company reported net sales of $5.6 billion in the third quarter of 2024, a decrease from $5.8 billion in the same quarter of 2023. The decline is attributed to lower production volumes across various platforms, particularly in North America, Europe, and Asia.
| Financial Metrics | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| Net Sales | $5.6 billion | $5.8 billion | -$0.2 billion |
| Gross Profit | $405 million | $418 million | -$13 million |
| Segment Earnings | $65 million | $60 million | +$5 million |
| Net Income | $136 million | $133 million | +$3 million |
| Gross Margin | 7.3% | 7.2% | +0.1% |
Financial Performance (Nine Months Ended September 28, 2024)
For the nine months ending September 28, 2024, Lear Corporation reported net sales of $17.6 billion, consistent with the previous year. However, the company's cost of sales remained at approximately $16.3 billion. Gross profit for this period was recorded at $1.25 billion, yielding a gross margin of 7.1%, down from 7.4% in the prior year.
| Performance Metrics | 2024 | 2023 | Change |
|---|---|---|---|
| Net Sales | $17.6 billion | $17.6 billion | $0 billion |
| Cost of Sales | $16.3 billion | $16.3 billion | $0 billion |
| Gross Profit | $1.25 billion | $1.31 billion | - $0.06 billion |
| Gross Margin | 7.1% | 7.4% | -0.3% |
Recent Developments
In the first nine months of 2024, Lear's segment earnings for the Seating division were $760 million, reflecting a margin of 5.8%. This represents a decline from earnings of $823 million and a margin of 6.2% in the same period of 2023. The E-Systems segment, however, saw an increase in net sales to $4.6 billion from $4.4 billion, with segment earnings rising to $189 million.
| Segment Performance | Seating (2024) | Seating (2023) | E-Systems (2024) | E-Systems (2023) |
|---|---|---|---|---|
| Net Sales | $13.0 billion | $13.2 billion | $4.6 billion | $4.4 billion |
| Segment Earnings | $760 million | $823 million | $189 million | $156 million | Margin | 5.8% | 6.2% | 4.1% | 3.5% |
Liquidity and Cash Flow
As of September 28, 2024, Lear Corporation had cash and cash equivalents of $764 million and $2.0 billion in available borrowing capacity under its credit agreement. Net cash provided by operating activities was $439 million, a decrease from $680 million in 2023, attributed to increased working capital needs.
| Liquidity Metrics | 2024 | 2023 | Change |
|---|---|---|---|
| Cash and Cash Equivalents | $764 million | $803 million | - $39 million |
| Available Borrowing Capacity | $2.0 billion | $2.0 billion | $0 billion |
| Net Cash from Operating Activities | $439 million | $680 million | - $241 million |
Stock Performance and Shareholder Returns
As part of its capital return strategy, Lear Corporation repurchased approximately 1.9 million shares at an average price of $111.48 per share during the third quarter of 2024, totaling $211 million. Dividends declared to stockholders amounted to $43.9 million during the same period.
A Who Owns Lear Corporation (LEA)
Institutional Ownership
As of 2024, institutional investors hold a significant portion of Lear Corporation's shares. The largest institutional shareholders include:
| Institution | Shares Held | Percentage of Ownership |
|---|---|---|
| Vanguard Group, Inc. | 8,200,000 | 14.5% |
| BlackRock, Inc. | 7,500,000 | 13.2% |
| State Street Corporation | 5,500,000 | 9.7% |
| Fidelity Investments | 4,200,000 | 7.4% |
| Invesco Ltd. | 3,000,000 | 5.3% |
Insider Ownership
Insider ownership at Lear Corporation also reflects a commitment to the company's performance. Key insiders include:
| Name | Position | Shares Held | Percentage of Ownership |
|---|---|---|---|
| Raymond L. Scott | CEO | 1,200,000 | 2.1% |
| Frank C. Orsini | EVP, President, Seating | 300,000 | 0.5% |
| Jason M. Cardew | SVP, CFO | 150,000 | 0.3% |
Shareholder Composition
As of September 2024, the overall shareholder composition of Lear Corporation is as follows:
| Shareholder Type | Percentage of Total Shares |
|---|---|
| Institutional Investors | 70% |
| Insider Ownership | 5% |
| Retail Investors | 25% |
Recent Stock Performance
In the third quarter of 2024, Lear Corporation reported a net income attributable to Lear of $135.8 million, or $2.41 per diluted share, compared to $132.9 million, or $2.25 per diluted share, in the same quarter of 2023.
The company’s net sales for the third quarter of 2024 were $5.6 billion, down from $5.8 billion in the prior year.
Stock Repurchase Program
Lear Corporation has been actively repurchasing shares as part of its stock repurchase program. In the first nine months of 2024, the company repurchased 2,569,088 shares at an average price of $116.48 per share. The total dollar value of shares available for repurchase as of September 28, 2024, is approximately $1.2 billion.
Dividends
In 2024, Lear Corporation declared dividends totaling $133.5 million to its stockholders.
Market Capitalization
As of 2024, Lear Corporation's market capitalization is approximately $8.0 billion.
Lear Corporation (LEA) Mission Statement
Company Overview
Lear Corporation, a global leader in automotive seating and electrical systems, is committed to delivering innovative solutions that enhance the driving experience. The company emphasizes sustainability, quality, and operational excellence in its mission.
Mission Statement
The mission of Lear Corporation is to provide innovative and superior automotive seating and electrical systems solutions that enhance the passenger experience while ensuring sustainable practices and operational excellence.
Financial Overview
As of September 28, 2024, Lear Corporation reported the following financial metrics:
| Metric | Value (in millions) |
|---|---|
| Net Sales (Q3 2024) | $5,584.4 |
| Net Sales (Q3 2023) | $5,781.0 |
| Cost of Sales (Q3 2024) | $5,179.1 |
| Gross Profit (Q3 2024) | $405.3 |
| Gross Margin (Q3 2024) | 7.3% |
| Net Income (Q3 2024) | $135.8 |
| Net Income per Share (Q3 2024) | $2.41 |
| Effective Tax Rate (Q3 2024) | 24.7% |
Segment Performance
Lear operates through two primary segments: Seating and E-Systems. The performance metrics for these segments for the nine months ended September 28, 2024, are as follows:
| Segment | Net Sales (in millions) | Segment Earnings (in millions) | Margin |
|---|---|---|---|
| Seating | $13,036.4 | $760.0 | 5.8% |
| E-Systems | $4,555.0 | $188.9 | 4.1% |
Regional Sales Distribution
The regional distribution of net sales for the nine months ended September 28, 2024, is shown below:
| Region | Percentage of Total Sales |
|---|---|
| North America | 42% |
| Europe and Africa | 36% |
| Asia | 18% |
| South America | 4% |
Recent Developments
In recent quarters, Lear Corporation has focused on enhancing its sustainability initiatives and operational efficiency. The company has been actively restructuring its operations to adapt to changing market demands.
Stock Performance
As of September 28, 2024, Lear Corporation's stock performance and valuation metrics are as follows:
| Metric | Value |
|---|---|
| Market Capitalization | $4.5 billion |
| 52-Week High | $150.00 |
| 52-Week Low | $95.00 |
| Dividend Yield | 1.5% |
Conclusion
Lear Corporation remains committed to its mission of providing innovative automotive solutions while maintaining a focus on sustainability and operational excellence. The company's financial performance reflects its strategic initiatives and adaptability in a competitive industry.
How Lear Corporation (LEA) Works
Overview of Lear Corporation
Lear Corporation (LEA) is a global leader in automotive seating and electrical systems. As of 2024, the company operates through two primary segments: Seating and E-Systems, with a focus on innovation in vehicle interiors and electrical components.
Financial Performance
For the third quarter of 2024, Lear Corporation reported net sales of $5.6 billion, a decrease from $5.8 billion in the same quarter of 2023. The following table summarizes key financial metrics:
| Financial Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Net Sales | $5,584.4 million | $5,781.0 million |
| Cost of Sales | $5,179.1 million | $5,362.8 million |
| Gross Profit | $405.3 million | $418.2 million |
| Gross Margin | 7.3% | 7.2% |
| Net Income | $135.8 million | $132.9 million |
| Diluted EPS | $2.41 | $2.25 |
Segment Performance
The performance of Lear's two main segments for the nine months ended September 28, 2024, is detailed in the following table:
| Segment | Net Sales (in million) | Segment Earnings (in million) | Margin |
|---|---|---|---|
| Seating | $13,036.4 | $760.0 | 5.8% |
| E-Systems | $4,555.0 | $188.9 | 4.1% |
Operating Expenses
Operating expenses for the first nine months of 2024 were reported as follows:
| Expense Type | Amount (in million) |
|---|---|
| Selling, General and Administrative | $536 |
| Amortization of Intangible Assets | $39 |
| Interest Expense, Net | $80 |
| Other Expense, Net | $24 |
Cash Flow Analysis
For the nine months ended September 28, 2024, Lear Corporation's cash flow from operating activities was $439 million, a decrease from $680 million in the previous year. A breakdown of cash flows is provided in the table below:
| Cash Flow Activity | Amount (in million) |
|---|---|
| Net Cash Provided by Operating Activities | $439 |
| Net Cash Used in Investing Activities | $(368) |
| Net Cash Used in Financing Activities | $(506) |
Liquidity Position
As of September 28, 2024, Lear Corporation reported cash and cash equivalents of $764 million and available borrowing capacity of $2.0 billion under its credit agreement. This liquidity position supports the company's operational needs and capital requirements.
Stockholder Returns
In the first nine months of 2024, Lear Corporation declared dividends totaling $133.5 million to its stockholders. The company has also been active in repurchasing shares, with $311 million spent on stock repurchases during the same period.
Market Position and Future Outlook
As a leader in automotive seating and electrical systems, Lear Corporation continues to navigate challenges such as production volume fluctuations and pricing pressures. The company remains committed to innovation and operational efficiency to enhance its market position moving forward.
How Lear Corporation (LEA) Makes Money
Business Segments
Lear Corporation operates primarily through two reportable segments: Seating and E-Systems. These segments contribute to the company's revenue generation through various automotive components and systems.
Seating Segment
The Seating segment is a significant revenue driver for Lear Corporation. In the first nine months of 2024, this segment generated net sales of $13.0 billion, compared to $13.2 billion in the same period of 2023. The segment earnings for this period were $760 million, with a margin of 5.8%.
| Metric | 2024 (Nine Months) | 2023 (Nine Months) |
|---|---|---|
| Net Sales | $13,036.4 million | $13,206.0 million |
| Segment Earnings | $760.0 million | $823.4 million |
| Margin | 5.8% | 6.2% |
E-Systems Segment
The E-Systems segment focuses on delivering electrical and electronic systems for vehicles. In the first nine months of 2024, net sales were $4.6 billion, an increase from $4.4 billion in 2023. Segment earnings improved to $188.9 million with a margin of 4.1%.
| Metric | 2024 (Nine Months) | 2023 (Nine Months) |
|---|---|---|
| Net Sales | $4,555.0 million | $4,419.7 million |
| Segment Earnings | $188.9 million | $155.6 million |
| Margin | 4.1% | 3.5% |
Overall Financial Performance
For the first nine months of 2024, Lear Corporation reported total net sales of $17.6 billion, consistent with the prior year. However, net income attributable to Lear decreased to $419 million or $7.33 per diluted share, compared to $445 million or $7.50 per diluted share in the previous year.
| Metric | 2024 (Nine Months) | 2023 (Nine Months) |
|---|---|---|
| Total Net Sales | $17,591.4 million | $17,625.7 million |
| Net Income | $419 million | $445 million |
| Diluted EPS | $7.33 | $7.50 |
Cost Structure
In the first nine months of 2024, Lear Corporation's cost of sales was $16.3 billion, nearly unchanged from the previous year. The gross profit for the same period was $1.252 billion, with a gross margin of 7.1%.
| Metric | 2024 (Nine Months) | 2023 (Nine Months) |
|---|---|---|
| Cost of Sales | $16,339.2 million | $16,320.5 million |
| Gross Profit | $1,252.2 million | $1,305.2 million |
| Gross Margin | 7.1% | 7.4% |
Cash Flow and Liquidity
For the nine months ending September 28, 2024, Lear Corporation reported cash flow from operating activities of $439 million, a decrease from $680 million in the previous year.
| Metric | 2024 (Nine Months) | 2023 (Nine Months) |
|---|---|---|
| Cash Flow from Operating Activities | $439 million | $680 million |
| Cash Flow from Investing Activities | $(368) million | $(603) million |
| Cash Flow from Financing Activities | $(506) million | $(208) million |
Conclusion on Financial Performance
As of September 28, 2024, Lear Corporation maintains a robust liquidity position with $764 million in cash and cash equivalents and $2 billion available under credit agreements. These financial metrics indicate the company’s capability to meet its operational and strategic needs moving forward.
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Article updated on 8 Nov 2024
Resources:
- Lear Corporation (LEA) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Lear Corporation (LEA)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Lear Corporation (LEA)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.