Lear Corporation
LEA
reported fourth-quarter 2021 adjusted earnings of $1.22 per share, plunging around 67% year over year. The bottom line, however, surpassed the Zacks Consensus Estimate of $1.07 per share. Higher-than-expected contribution from both the company’s segments led to the upside.
In the reported quarter, revenues declined around 7% year over year to $4,879.8 million. The top line beat the Zacks Consensus Estimate of $4,675.9 million.
Segment Performances
Sales in the Seating segment totaled $3,641 million in fourth-quarter 2021, reflecting a 6.6% decline from the year-ago quarter’s $3,899 million. Nonetheless, the metric surpassed the Zacks Consensus Estimate of $3,521 million. Adjusted segmental earnings came in at $198.7 million, declining from $295.2 million recorded in fourth-quarter 2020, but topping the consensus mark of $173 million. The segment recorded adjusted margins of 5.5% of sales, a decline from 7.6% in the previous-year quarter.
Sales in the E-Systems segment summed $1,239 million, down around 8% year over year. The figure, however, topped the consensus mark of $1,163 million. Adjusted segmental earnings amounted to $37.7 million, plummeting from $102.6 million. The metric, however, surpassed the consensus mark of $33 million. For the E-Systems segment, the adjusted margin was 3% of sales, down from 7.6% in the year-ago quarter.
Financial Position
The company had $1,318.3 million of cash and cash equivalents as of Dec 31, 2021, compared with $1,306.7 million recorded at 2020-end. It had long-term debt of $2,595.2 million as of Dec 31, 2021, up from $2,300.3 million on Dec 31, 2020.
At fourth quarter-end, net cash used in operating activities totaled around $167 million. In the reported period, its capital expenditure amounted to $179.6 million. Free cash flow (FCF) was a negative $12.7 million against a positive cash flow of $233.8 million in the previous-year quarter. The company increased quarterly cash dividend to 77 cents per share, on par with the pre-pandemic level.
2022 Guidance
Full-year net sales are expected within $20.8-$22.3 billion. Core operating earnings are envisioned in the band of $900-$1200 million. Lear also anticipates FCF in the band of $300-$600 million. Capital spending is anticipated to be within $650-$700 million. Adjusted EBITDA has been forecast in the range of $1,500-$1,800 million.
Zacks Rank & Key Picks
Currently, Lear has a Zacks Rank #3 (Hold).
Better-ranked players in the auto space include
Goodyear Tire
GT
and
Tesla
TSLA
, each sporting a Zacks Rank #1(Strong Buy) and
Genuine Parts
GPC
, carrying a Zacks Rank #2 (Buy) currently. You can see
the complete list of today’s Zacks #1 Rank stocks here
.
Goodyear has an expected earnings growth rate of 51.7% for the current year. The Zacks Consensus Estimate for current-year earnings has been revised around 1.1% upward over the past 60 days.
Goodyear’s earnings beat the Zacks Consensus Estimate in all of the trailing four quarters. GT pulled off a trailing four-quarter earnings surprise of 228.5%, on average. The stock has also rallied 64.1% over a year.
Tesla has an expected earnings growth rate of 35.21% for the current year. The Zacks Consensus Estimate for current-year earnings has been revised around 5% upward over the past 60 days.
Tesla’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters. TSLA pulled off a trailing four-quarter earnings surprise of 25.38%, on average. The stock has also rallied 5.1% over a year.
Genuine Parts has an expected earnings growth rate of 10.03% for the current year. The Zacks Consensus Estimate for earnings for the current year has been revised around 2.2% upward over the past 60 days.
Genuine Parts’ earnings beat the Zacks Consensus Estimate in all the trailing four quarters. GPC pulled off a trailing four-quarter earnings surprise of around 16%, on average. The stock has also rallied 23.8% over a year.
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