Lear (NYSE:LEA) Posts Quarterly Earnings Results, Beats Estimates By $0.39 EPS

Lear (NYSE:LEA) released its quarterly earnings data on Friday. The auto parts company reported $3.71 EPS for the quarter, beating analysts’ consensus estimates of $3.32 by $0.39, FiscalAI reports. The business had revenue of $5.77 billion during the quarter, compared to analysts’ expectations of $5.81 billion. Lear had a net margin of 2.35% and a return on equity of 14.18%. The firm’s quarterly revenue was up 1.6% on a year-over-year basis. During the same quarter in the prior year, the company earned $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 Performance

LEA traded up $1.09 during midday trading on Friday, reaching $118.47. The company had a trading volume of 841,160 shares, compared to its average volume of 602,615. The stock has a market cap of $5.84 billion, a PE ratio of 11.04, a P/E/G ratio of 0.66 and a beta of 1.29. The business has a 50-day moving average price of $122.30 and a two-hundred day moving average price of $128.39. The company has a debt-to-equity ratio of 0.51, a quick ratio of 1.04 and a current ratio of 1.31. Lear has a 12-month low of $99.00 and a 12-month high of $150.33.

Lear Dividend Announcement

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 dividend of $0.77 per share. The ex-dividend date was Wednesday, September 2nd. This represents a $3.08 dividend on an annualized basis and a yield of 2.6%. Lear’s payout ratio is 28.70%.

Wall Street Analyst Weigh In

A number of research analysts have weighed in on the stock. 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 research note on Monday, October 12th. Barclays cut their target price on Lear from $155.00 to $145.00 and set an “equal weight” rating on the stock in a research note on Friday, October 9th. Wall Street Zen lowered Lear from a “buy” rating to a “hold” rating in a research report on Sunday, October 25th. JPMorgan Chase & Co. lowered shares of Lear from an “overweight” rating to a “neutral” rating and dropped their price target for the stock from $175.00 to $150.00 in a research report on Tuesday, September 15th. Finally, The Goldman Sachs Group dropped their price target on Lear from $140.00 to $124.00 and set a “buy” rating on the stock in a research note on Tuesday, October 6th. One analyst has rated the stock with a Strong Buy rating, three have issued a Buy rating and twelve have given a Hold rating to the company’s stock. According to data from MarketBeat.com, Lear presently has a consensus rating of “Hold” and a consensus target price of $143.58.

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 outstanding shares. This repurchase authorization permits the auto parts company to reacquire up to 25.7% of its shares through open market purchases. Stock repurchase plans are usually an indication that the company’s leadership believes its stock is undervalued.

Insiders Place Their Bets

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 owned 37 shares of the company’s stock, valued at $4,489.95. This represents a 97.80% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available through the SEC website. 1.02% of the stock is owned by corporate insiders.

Trending Headlines about Lear

Here are the key news stories impacting Lear this week:

• Positive Sentiment: Adjusted earnings beat estimates: Lear reported third-quarter adjusted EPS of $3.71, well above the $3.32 consensus estimate and up from $2.79 a year earlier. Lear Q3 Earnings Top Estimates
• Positive Sentiment: Profitability and cash generation improved: Revenue rose approximately 2% year over year to $5.773 billion, while net income increased 26% to $136.6 million and core operating earnings grew to $255.7 million. Operating cash flow was $329.3 million. Lear Q3 Revenue Rises 2% to $5.8 Billion
• Positive Sentiment: Shareholder returns continued: Lear repurchased $175 million of stock and paid $38 million in dividends during the quarter, potentially supporting per-share results and signaling confidence in cash generation. Lear Reports Third Quarter 2026 Results
• Neutral Sentiment: Full-year outlook was maintained: Lear kept its core operating earnings outlook and projected 2026 sales of $23.35 billion to $23.75 billion, with operating cash flow guidance of $1.225 billion to $1.325 billion. Maintaining guidance reduces the risk of an estimate reset but provides limited upside surprise.
• Negative Sentiment: Revenue slightly missed expectations: Sales of $5.773 billion were below the approximately $5.81 billion consensus forecast, highlighting continued pressure in the automotive production environment. Lear Earnings Beat and Revenue Miss
• Negative Sentiment: Insider selling is a cautionary signal: Company insiders reported 12 sales and no purchases over the past six months, including sales by the CEO and CFO. While these transactions may be routine, they could weigh on sentiment.

Lear Company Profile

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.