Lear Shares Shrink 4% Since Q3 Earnings Beat Expectations

Shares of Lear Corp. LEA fell 4% since it reported its third-quarter 2024 results. The company reported adjusted earnings per share of $2.89, which increased from $2.87 recorded in the year-ago quarter and beat the Zacks Consensus Estimate of $2.57. In the reported quarter, revenues decreased 3% year over year to $5.58 billion but surpassed the Zacks Consensus Estimate of $5.52 billion.Stay up-to-date with the quarterly releases: See Zacks Earnings Calendar.Lear Corporation Price, Consensus and EPS Surprise Lear Corporation price-consensus-eps-surprise-chart | Lear Corporation QuoteSegment PerformanceSales of the Seating segment totaled $4.11 billion in the reported quarter, down from $4.28 billion generated in the year-ago quarter but surpassed the Zacks Consensus Estimate of $4.04 billion. Adjusted segment earnings came in at $261.5 million, down from $274.9 million recorded in the year-ago quarter but beating the Zacks Consensus Estimate of $246 million. The segment recorded adjusted margins of 6.4% of sales, the same as recorded in the previous year's quarter.Sales of the E-Systems segment were $1.47 billion, falling 1.6% year over year but beating the Zacks Consensus Estimate of $1.44 billion. Adjusted segmental earnings amounted to $74.2 million, down from $78.9 million in the corresponding quarter of 2023 and lagging the Zacks Consensus Estimate of $78 million. For the E-Systems segment, the adjusted margin was 5% of sales, down from 5.3% in the year-ago quarter.Performance by RegionSales in the North America region increased 0.9% year over year to $2.40 billion in the quarter under review and beat the Zacks Consensus Estimate of $2.23 billion.Sales in the Europe and Africa region fell 6.1% year over year to $1.89 billion, missing the Zacks Consensus Estimate of $1.90 billion.Sales in the Asia region totaled $1.05 billion in the quarter, which declined 7.6% year over year and missed the Zacks Consensus Estimate of $1.11 billion.Sales in the South America region totaled $233.5 million in the quarter, down from $241.7 million generated in the year-ago period and missing the Zacks Consensus Estimate of $242 million.Financial PositionThe company had $764 million in cash and cash equivalents as of Sept. 28, 2024, compared with $1.2 billion recorded as of Dec. 31, 2023. Long-term debt was $2.77 billion as of Sept. 28, 2024, compared with $2.74 billion at the end of 2023.During the quarter under discussion, net cash provided by operating activities totaled $182.7 million. In the reported period, capital expenditure amounted to $132.2 million. The company registered free cash flow (“FCF”) of $50.5 million in the quarter.During the quarter, LEA repurchased 1,875,382 shares of its common stock for a total of $209 million. At the end of the quarter, Lear had a remaining share repurchase authorization of nearly $1.2 billion.LEA Updates 2024 GuidanceLear now projects its full-year net sales in the band of $22.95-$23.15 billion, down from the previous guidance of $23.23-$23.67 billion. Core operating earnings are envisioned in the range of $1.04-$1.09 billion compared with the previous estimate of $1.03-$1.2 billion.Operating cash flow is projected between $1,110 million and $1,160 million, down from the previous outlook of $1,135-$1,285 million. Lear anticipates FCF in the band of $535-$585 million compared with the previous estimate of $485-$635 million. Capital spending is now estimated to be $575 million, down from the previous outlook of $650 million. Adjusted EBITDA is envisioned between $1.67 billion and $1.72 billion, down from the previous guidance of $1.67-$1.84 billion.Zacks Rank & Key PicksLEA currently carries a Zacks Rank #5 (Strong Sell).Some better-ranked stocks in the auto space are REE Automotive Ltd. REE, CytoDyn Inc. CYDY, and BYD Company Limited BYDDY. While REE and CYDY sport a Zacks Rank #1 (Strong Buy) each, BYDDY carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.The Zacks Consensus Estimate for REE’s 2024 earnings suggests year-over-year growth of 64.37%. Earnings per share (EPS) estimates for 2024 and 2025 have improved $2.98 and $2.75, respectively, in the past 30 days.The Zacks Consensus Estimate for CYD’s 2024 sales and earnings suggests year-over-year growth of 19.37% and 43.43%, respectively. EPS estimates for 2024 have improved by 35 cents in the past 60 days.The Zacks Consensus Estimate for BYDDY’s 2024 sales and earnings suggests year-over-year growth of 21.88% and 19.52%, respectively. EPS estimates for 2024 and 2025 have improved by 7 cents and 13 cents, respectively, in the past 30 days.Research Chief Names "Single Best Pick to Double"From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Lear Corporation (LEA): Free Stock Analysis Report CytoDyn Inc. (CYDY): Free Stock Analysis Report REE Automotive Ltd. (REE): Free Stock Analysis Report Byd Co., Ltd. (BYDDY): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks