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Lear Q2 Results Hit by Chip Shortage, Reduces 2021 Guidance; $142 FVE Unchanged

Richard Hilgert Senior Equity Analyst

Analyst Note

| Richard Hilgert |

Narrow-moat  Lear reported second-quarter earnings per share before special items of $2.45, missing the $2.69 FactSet consensus estimate by $0.24, but $6.59 higher than the coronavirus-hammered $4.14 loss reported a year ago. Sequentially from the first quarter, EPS was lower by $1.26. Revenue surged 95% year over year to $4.8 billion from $2.4 billion, but declined by 11% reported from the first quarter as customer production was sporadic due to the chip shortage. However, year over year organic growth was 83.0%, representing an 11-percentage point outperformance versus production adjusted to Lear’s customer base.

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Company Profile

Business Description

Lear designs, develops, and manufactures automotive seating and electrical systems and components. Seating components include frames and mechanisms, covers (leather and woven fabric), foam, and headrests. Automotive electrical distribution systems and major electrical and electronic components include wiring harnesses, terminals and connectors, junction boxes, electronic control modules, wireless control devices, interior and exterior LED lighting systems, and audio systems and electronics.

21557 Telegraph Road
Southfield, MI, 48033
T +1 248 447-1500
Sector Consumer Cyclical
Industry Auto Parts
Most Recent Earnings Jun 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type Cyclical
Employees 174,600