Analyst Note| Richard Hilgert |
Narrow-moat-rated Lear reported third-quarter earnings per share before special items of $2.33, beating the $2.12 FactSet consensus estimate by $0.21 and climbing $1.80 from $0.53 EPS reported a year ago when the chip crunch was at its worst. Results continue to be impacted by sporadic customer production, but to a lesser degree, from China's COVID-19 lockdowns, the chip crunch, the Ukraine crisis, supply chain disruption, higher raw material cost, and increased logistic expense. Revenue increased 23% to $5.2 billion from $4.3 billion last year, better than consensus by 2%. Excluding currency and acquisitions, organic revenue rose 26%, 1% point above the 25% increase in global light vehicle production adjusted to Lear’s customer base. Revenue growth was supported by new business backlog, higher customer production, and customer cost recoveries.