Lear Corporation, a US-based global leader in automotive technology, has reported a strong start to the fiscal year 2023, with a 12% year-on-year increase in sales to $5.8 billion for the first quarter. Excluding the impact of commodities, foreign exchange, and acquisitions, sales were up 14%, indicating a boost in production on key Lear platforms and the addition of new business across both business segments.
The company attributes the sales growth over the market in the first quarter to the impact of new business and favorable platform mix. The seating segment had margins and adjusted margins of 6.4% and 6.7% of sales, respectively, while the e-systems segment had margins and adjusted margins of 3% and 3.5% of sales, respectively.
Lear’s core operating earnings in Q1 FY23 were $263 million, representing 4.5% of sales, compared to $184 million, or 3.5% of sales, in Q1 FY22. The increase in earnings resulted primarily from higher production on key Lear platforms and the addition of new business, which was partially offset by the impact of foreign exchange.
Adjusted earnings per share were reported to be $2.78, reflecting a 54% increase compared to the same period last year, primarily due to higher operating earnings. Meanwhile, earnings per share were $2.41. Net income for the quarter was reported at $144 million, with adjusted net income of $166 million, compared to $49 million and $108 million, respectively, in Q1 FY22.
For FY23, the company expects its net sales to range between $21.2 billion and $22.2 billion. The predicted core operating earnings for the year are $875 million to $1.075 billion, and the adjusted EBITDA is expected to be between $1.475 billion and $1.675 billion. The company anticipates incurring restructuring costs of approximately $100 million. The estimated operating cash flow is between $1.075 billion to $1.225 billion.
“Lear started the year strong, delivering significant increases in revenue and earnings in the first quarter compared to last year and strong growth over market in both businesses. We expect our positive momentum to continue as recent business awards and strong backlog in both business segments will continue to drive above-market growth,” said Ray Scott, Lear’s president, and chief executive officer.
Lear Corporation is a leading supplier of automotive seating and electrical systems and has been in operation for over 100 years. The company operates in 39 countries and employs around 165,000 employees globally. With its strong performance in the first quarter of FY23 and a positive outlook for the rest of the year, Lear Corporation is poised to maintain its position as a leading player in the global automotive industry.