Lear (NYSE:LEA) Posts Quarterly Earnings Results, Beats Expectations By $0.39 EPS

Lear (NYSE:LEA) posted its quarterly earnings results on Friday. The auto parts company reported $3.71 EPS for the quarter, beating the consensus estimate of $3.32 by $0.39, FiscalAI reports. The company had revenue of $5.77 billion during the quarter, compared to analysts’ expectations of $5.81 billion. Lear had a return on equity of 14.18% and a net margin of 2.35%. The firm’s revenue was up 1.6% on a year-over-year basis. During the same quarter in the previous year, the business earned $2.79 EPS.

Here are the key takeaways from Lear’s conference call:

• Third-quarter results improved year over year: sales rose 2% to $5.8 billion despite a 2% decline in Lear-weighted industry production, while core operating earnings increased 6% to $256 million and adjusted EPS climbed 33% to $3.71.
• Lear generated approximately $3.9 billion in year-to-date net business awards, including significant Seating wins with Mahindra, BYD, Mercedes and Jaguar Land Rover, while roughly 70% of E-Systems awards came from new or conquest programs.
• The company highlighted its Orion, Michigan facility as a scalable automation blueprint that is expected to reduce Seating conversion costs by approximately 10% to 15%; Lear also completed its $350 million share-repurchase target early and expanded authorization to $1.5 billion through 2029.
• Lear reduced its full-year revenue outlook by approximately $225 million, primarily because of lower production volumes and worsening consumer demand in China, although it maintained its core operating earnings outlook through restructuring savings, operational improvements and commercial recoveries.
• Management expects ongoing challenges from China, commodities and launch costs, but said it remains confident in delivering targeted net performance improvements in 2027; full 2027 guidance will be provided in February.

Lear Price Performance

NYSE:LEA opened at $118.47 on Friday. The firm has a market cap of $5.84 billion, a price-to-earnings ratio of 10.35, a P/E/G ratio of 0.67 and a beta of 1.29. Lear has a 52 week low of $99.00 and a 52 week high of $150.33. The company has a debt-to-equity ratio of 0.51, a quick ratio of 1.04 and a current ratio of 1.31. The firm’s 50-day simple moving average is $122.17 and its 200 day simple moving average is $128.37.

Lear Announces Dividend

The company also recently declared a quarterly dividend, which was paid on Tuesday, September 22nd. Shareholders of record on Wednesday, September 2nd were paid a $0.77 dividend. The ex-dividend date was Wednesday, September 2nd. This represents a $3.08 dividend on an annualized basis and a yield of 2.6%. Lear’s dividend payout ratio (DPR) is currently 28.70%.

Insiders Place Their Bets

In related news, Director Conrad L. Mallett, Jr. sold 1,646 shares of the stock in a transaction on Thursday, August 6th. The stock was sold at an average price of $121.35, for a total value of $199,742.10. Following the completion of the sale, the director directly owned 37 shares in the company, valued at $4,489.95. This represents a 97.80% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which is available at this hyperlink. 1.02% of the stock is owned by corporate insiders.

Key Stories Impacting Lear

Here are the key news stories impacting Lear this week:

• Positive Sentiment: Adjusted EPS beat estimates: Lear reported third-quarter non-GAAP earnings of $3.71 per share, above the $3.32 analyst consensus and up from $2.79 a year earlier. Lear Q3 Earnings Top Estimates
• Positive Sentiment: Profitability and cash generation improved: Third-quarter net income attributable to Lear rose 26% to $136.6 million, while core operating earnings increased to $255.7 million from $241.1 million. Operating cash flow reached $329.3 million. Lear Reports Third Quarter 2026 Results
• Positive Sentiment: Shareholder returns continued: Lear repurchased approximately $175 million of stock and paid $38 million in dividends during the quarter, potentially supporting per-share value and investor sentiment.
• Positive Sentiment: Outlook was maintained: Management kept its full-year core operating earnings outlook and forecast 2026 operating cash flow of $1.225 billion to $1.325 billion, while setting full-year revenue guidance at $23.35 billion to $23.75 billion.
• Neutral Sentiment: Sales growth was modest: Revenue increased roughly 2% year over year to $5.773 billion, but was about $10 million below consensus estimates. The small miss may limit the upside reaction despite the earnings beat. Lear EPS Beats, Revenue Misses
• Negative Sentiment: Insider trading was a cautionary signal: Company insiders made no reported purchases and sold shares in the past six months, including sizable sales by the CEO and CFO. Such activity is not necessarily tied to business fundamentals but may weigh on sentiment.

Analysts Set New Price Targets

Several equities research analysts recently weighed in on LEA shares. Weiss Ratings lowered shares of Lear from a “buy (b-)” rating to a “hold (c+)” rating in a research note on Wednesday, September 9th. BNP Paribas Exane lowered Lear from an “outperform” rating to a “neutral” rating in a report on Monday, August 3rd. UBS Group reduced their price objective on Lear from $141.00 to $132.00 and set a “neutral” rating for the company in a research note on Wednesday, October 7th. Royal Bank Of Canada cut their target price on shares of Lear from $143.00 to $139.00 and set a “sector perform” rating for the company in a research report on Monday, October 12th. Finally, The Goldman Sachs Group decreased their price target on Lear from $140.00 to $124.00 and set a “buy” rating for the company in a research note on Tuesday, October 6th. One research analyst has rated the stock with a Strong Buy rating, three have given a Buy rating and twelve have issued a Hold rating to the stock. According to data from MarketBeat.com, Lear currently has an average rating of “Hold” and a consensus price target of $143.58.

Lear declared that its board has approved a share buyback program on Thursday, September 24th that authorizes the company to repurchase $1.50 billion in shares. This buyback authorization authorizes the auto parts company to reacquire up to 25.7% of its shares through open market purchases. Share buyback programs are usually an indication that the company’s management believes its shares are undervalued.

Lear Company Profile

Lear Corporation is a global automotive technology company that designs and manufactures products used in passenger vehicles and commercial vehicles. Its operations are organized primarily around two areas: seating and e-systems. Lear supplies complete vehicle seating systems, including seats, structures, mechanisms, foam, covers and related components, as well as electrical distribution systems and other technologies that support vehicle power management and connectivity.

The company serves automotive manufacturers and their vehicle programs in major markets across North America, Europe, Asia and other regions.