Southfield’s Lear Corp., a global supplier of automotive seating and electrical and electronic systems, reported sales of $21.1 billion and net income of about $1.15 billion for the full year 2018.
Sales were up 3 percent from $20.5 billion for the full year 2017, and net income is down from about $1.3 billion the year before. Adjusted net income for the year was about $1.2 billion, up from about $1.18 billion the year before.
Core operating earnings increased from $1.72 billion in 2017 to $1.75 billion in 2018. Earnings per share ended at $17.22, down from $18.59 the year before, and adjusted earnings per share increased from $17 in 2017 to $18.22 in 2018.
Net cash provided by operating activities was $1.8 billion, and free cash flow was $1.1 billion.
“Despite a more challenging macroeconomic and industry environment, we delivered solid financial results,” says Ray Scott, president and CEO of Lear. “Our performance demonstrates our strong execution capabilities and our continued investment in innovation. We are in the strongest overall financial and competitive position in our history, as evidenced by our strong backlog, and we are excited about the significant growth opportunities in front of us.
“While the industry will continue to face challenges in 2019, we are well-positioned with two high-performing business segments that are complementary and aligned with the key trends driving the future of the automotive industry. Our unique product capabilities and industry-leading cost structure will position us to be able to continue to deliver profitable sales growth and sustainable, long-term shareholder value.”
In the fourth quarter of 2018, Lear reported sales of $4.9 billion, down 8 percent year-over-year from $5.4 billion. Net income was down from $401 million year-over-year to $212 million, while adjusted net income dropped year-over-year from $300 million to $261 million.
Core operating earnings were $389 million, down from $441 million in the fourth quarter of 2017. Earnings per share was $3.39, and adjusted earnings per share was $4.05, compared to $5.80 and $4.38, respectively.
Net cash provided by operating activities was $758 million, and free cash flow was $574 million.
Lear’s financial outlook hasn’t changed since it was introduced on Jan. 15 and estimates net sales of $20.9 billion-$21.7 billion. The company expects $1.6 billion-$1.7 billion core operating earnings and adjusted earnings before interest, taxes, depreciation, and amortization of about $2.1 billion-$2.2 billion. Its expected adjusted net income is about $1.1 billion, while the company expects about $140 million will be spent on restructuring costs and $700 million to go toward capital spending. It expects about $850 million-$950 million to be free cash flow.
The outlook is based on IHS industry production assumptions for the company’s vehicle platforms, customer production schedules and internal estimates, an average exchange rate of $1.13 for the Euro, and 6.95 RMB/$ for the Chinese renminbi.