Lear Corporation (NYSE:LEA), a leading name in automotive technology, reported second-quarter earnings that fell short of analyst expectations on Friday, even though revenue slightly surpassed forecasts.
Following the earnings release, Lear’s stock plunged 9.83% in pre-market trading.
The company posted earnings per share of $3.06 for Q2, missing the analyst consensus of $3.26 by 20 cents. Revenue came in at $6 billion, a bit higher than the estimated $5.89 billion and essentially flat year-over-year.
Core operating earnings slipped to $292 million, representing 4.8% of sales, down from $302 million (5.0% of sales) in Q2 2024. This decline was mainly due to reduced production volumes on key Lear platforms, partially offset by operational efficiencies and new contracts.
“Lear continued its momentum from the start of the year through the second quarter, with strong operating performance driving solid margins in both business segments,” said Ray Scott, Lear’s President and CEO. “Our investments in automation and restructuring will extend our industry leadership in operational excellence and drive sustainable margin improvement.”
Lear reaffirmed its full-year 2025 revenue forecast, targeting between $22.47 billion and $23.07 billion, consistent with the consensus estimate of $22.67 billion. The company also expects core operating earnings to range from $955 million to $1.095 billion.
Despite the operational hurdles, Lear maintained shareholder returns, repurchasing $25 million in shares and distributing $41 million in dividends during the quarter. The company also secured several new contracts, including conquest programs with BMW (ETR:BMWG) and Ford, as well as new deals with Chinese EV manufacturers Leapmotor (HK:9863) and XPeng (NYSE:XPEV).
Global vehicle production increased by 3% year-over-year, with North America down 3%, Europe down 2%, and China up 9%. On a Lear sales-weighted basis, production was flat, which contributed to the company’s earnings challenges.
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