August 2, 2007 -- Automotive parts supplier Lear Corp., whose shareholders recently rejected a $2.9 billion buyout bid led by billionaire investor Carl Icahn, said Thursday it recorded a profit in the second quarter as its cost-cutting efforts more than offset the impact of lower revenues. The Southfield-based maker of automotive seating and electrical distribution systems earned $123.6 million, or $1.58 per share, in the three months ended June 30 versus a loss of $6.4 million, or 10 cents per share, a year ago.
The latest quarter includes restructuring costs of $34.8 million and other items totaling $3.4 million. In the 2006 quarter, Lear recorded restructuring and other charges of $24.3 million. Net sales declined nearly 14 percent to $4.16 billion from $4.81 billion, reflecting primarily the divestiture of Lear's interior business and lower production in North America. On average, analysts surveyed by Thomson Financial forecast a quarterly profit of 91 cents per share on revenue of $3.98 billion. The earnings estimates typically exclude one-time items. Lear said the cost of sales declined 16 percent to $3.82 billion while selling, general and administrative expenses fell 16 percent to $142.8 million.
"The Lear team was able to deliver improved financial results as benefits from restructuring activities, ongoing cost and efficiency actions and new business globally more than offset lower production in North America," Bob Rossiter, Lear chairman and chief executive, said in a statement. Lear raised its outlook for 2007 sales due to a stronger euro and increased production outside North America. The company expects annual sales of about $15 billion, up $200 million from its prior outlook. Analysts surveyed by Thomson Financial forecast sales of $15.3 billion, on average.
Lear still sees core operating earnings for the year between $600 million and $640 million, though it is now seen at or near the high end of the range. The twice-delayed vote on a buyout by Icahn's American Real Estate Partners LP came in July after months of criticism and court challenges. Icahn increased his original $2.8 billion offer, but some shareholders said it was worth far more and questioned whether it was in their best interest. Lear has more than 90,000 employees at 236 facilities in 33 countries.
Source: Associated Press Newswires
Source: Factiva
