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

Lear (NYSE:LEA) issued its quarterly earnings data on Friday. The auto parts company reported $3.71 earnings per share for the quarter, topping analysts’ consensus estimates of $3.32 by $0.39, FiscalAI reports. The business had revenue of $5.77 billion for the quarter, compared to analyst estimates of $5.81 billion. Lear had a return on equity of 14.18% and a net margin of 2.35%. Lear’s quarterly revenue was up 1.6% compared to the same quarter last year. During the same quarter in the previous year, the company posted $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 Stock Up 0.9%

LEA stock traded up $1.09 during trading on Friday, reaching $118.47. 841,160 shares of the stock were exchanged, compared to its average volume of 470,780. The firm’s 50 day moving average is $122.17 and its 200 day moving average is $128.37. Lear has a twelve month low of $99.00 and a twelve month high of $150.33. The company has a current ratio of 1.31, a quick ratio of 1.04 and a debt-to-equity ratio of 0.51. The firm has a market cap of $5.84 billion, a P/E ratio of 11.04, a price-to-earnings-growth ratio of 0.67 and a beta of 1.29.

Lear Announces Dividend

The business 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. This represents a $3.08 annualized dividend and a yield of 2.6%. The ex-dividend date of this dividend was Wednesday, September 2nd. Lear’s payout ratio is 28.70%.

Insider Buying and Selling at Lear

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 transaction, the director directly owned 37 shares in the company, valued at $4,489.95. This trade represents a 97.80% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available at this link. 1.02% of the stock is owned by insiders.

Lear News Roundup

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.

Lear announced that its Board of Directors has approved a stock buyback plan on Thursday, September 24th that permits the company to repurchase $1.50 billion in shares. This repurchase authorization permits the auto parts company to reacquire up to 25.7% of its stock through open market purchases. Stock repurchase plans are usually an indication that the company’s leadership believes its stock is undervalued.

Wall Street Analyst Weigh In

A number of equities research analysts have weighed in on LEA shares. Wells Fargo & Company boosted their target price on shares of Lear from $137.00 to $138.00 and gave the stock an “equal weight” rating in a report on Monday, August 3rd. Wall Street Zen downgraded shares of Lear from a “buy” rating to a “hold” rating in a research note on Sunday, October 25th. Royal Bank Of Canada cut their price target on shares of Lear from $143.00 to $139.00 and set a “sector perform” rating on the stock in a report on Monday, October 12th. UBS Group decreased their price objective on Lear from $141.00 to $132.00 and set a “neutral” rating for the company in a report on Wednesday, October 7th. Finally, JPMorgan Chase & Co. downgraded shares of Lear from an “overweight” rating to a “neutral” rating and decreased their target price for the company from $175.00 to $150.00 in a research report on Tuesday, September 15th. One equities research analyst has rated the stock with a Strong Buy rating, three have issued a Buy rating and twelve have assigned a Hold rating to the company. According to MarketBeat, Lear presently has an average rating of “Hold” and an average target price of $143.58.

About Lear

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.