DETROIT -- Automotive supplier Lear Corp. posted second-quarter profits of $148.5 million, up 8 percent from $137.3 million, on higher light-vehicle output, record seating sales, and solid gains and expanded profit margins in its electrical distribution business.
It also hiked its outlook for revenue and profits for the year after raising its forecasts for light vehicle production in North America and Europe.
In the second quarter, Lear said global vehicle production increased 3 percent from a year ago, reflecting increases in output in each of the three largest automotive markets worldwide.
Production rose 12 percent in China, 4 percent in North America and 2 percent in Europe & Africa, while it fell in South America.
The second-quarter earnings results were equal to $1.81 per share.
Excluding one-time items that were primarily restructuring costs, Lear earned $2.12 per share. Analysts polled by Thomson Reuters I/B/E/S had expected earnings of $1.97 a share.
Revenue for the quarter rose 11 percent to $4.59 billion, exceeding analysts' projections of $4.44 billion.
Sales in the company's Europe and Africa business, $1.83 billion, accounted for 40 percent of the total, followed by North America at $1.74 billion, or 38 percent. Asian sales of $774.3 million accounted for 17 percent, and South America had $237.7 million, or 5 percent.
Sales rose 16 percent in Europe and Africa, 12 percent in North America and 10 percent in China but fell 13 percent in South America.
Lear joined other automotive-related companies in experiencing a fall in South American business. The region's top markets -- Brazil, Argentina and Venezuela -- are suffering from weak economic growth.
Highlights in the second quarter:
- Seating sales rose 12 percent to a record $3.4 billion, reflecting the addition of new business and higher production on key platforms. Adjusted earnings in the seating business were $197 million, or 5.7 percent of sales, the company said.
- Sales in Lear's electrical distribution unit advanced 9 percent to a record $1.1 billion, aided primarily by new business. Adjusted earnings in the electrical segment were a record $143 million, or 12.5 percent of sales, marking the 19th consecutive quarter of year-over-year margin expansion, the company said. The unit is also benefiting from industry-leading costs, favorable industry growth trends and market share gains.
The company today said it expected sales in 2014 to range from $17.6 billion to $17.9 billion. It had previously forecast 2014 revenue of $17.2 billion to $17.7 billion.
Lear said it expected core operating earnings of $975 million to $1.025 billion, up from a previous range of $935 million to $985 million.
"Our record performance in the quarter reflects the investments that we have made in improving our cost structure and expanding our component capabilities globally," Lear CEO Matt Simoncini said in a statement. "We are well positioned to take advantage of industry trends toward global vehicle platforms, direct component sourcing and increasing electrical content."
In afternoon trading, Lear shares rose 3.2 percent to $98.82 on the New York Stock Exchange after trading as high as $100.58 in the morning.
"Sales have been outpacing industry growth and margins have been improving," Efraim Levy, an analyst at S&P Capital IQ, said in a note to investors after Lear reported earnings. "We see cash flow supporting accretive share repurchases and strategic acquisitions that enhance sales, technology and profits."
Reuters and David Phillips contributed to this report.