DETROIT -- Automotive interiors giant Lear Corp. said today that production cuts in North America will trim its earnings and sales for the year.
In a statement released before stock market trading, Lear said the cuts would mean a $60 million to $66 million reduction in operating earnings for 2006. The company previously expected operating earnings of $400 million to $440 million.
Lear also said it expected $300 million less in revenue this year.
Lear's two largest customers, General Motors and Ford Motor Co., both have announced broad fourth-quarter cutbacks in North American production. GM accounted for 28 percent of Lear's 2005 revenue and Ford 25 percent.
"We know our customers and our shareholders expect us to operate as efficiently as we can, and we are proactively looking at every aspect of our business for further improvement," Lear CEO Robert Rossiter said in a statement. "While we remain positive about the longer term outlook, we are taking additional steps now to ensure that we remain financially strong and even more competitive in the long run."
The company said the production cuts will hurt the third and fourth quarters and each of its business segments.
Lear lost $1.38 billion in 2005, about $1 billion of which was for nonrecurring charges and asset reductions. It returned to profitability this year with net income of $29.4 million over the first two quarters.
Lear, of suburban Detroit, ranks No. 7 on the Automotive News list of the top 100 global suppliers, with original-equipment automotive parts sales of $17.09 billion in 2005.
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