DETROIT -- Lear Corp.s announcement on Thursday, Dec. 20, of better-than-expected core earnings will not change Standard & Poors rating or outlook on the company, the corporate credit rating agency said today.
Still, we view this news as positive, the agency said in a statement.
S&P said its outlook could change from negative to stable if the supplier shows it can handle industry challenges, according to the statement.
Lears rating is below investment grade at B+ with a negative outlook, according to S&P.
Lear said Thursday that core operating earnings for 2007 will be better than expected, but it also told of plans to accelerate plant closings that were scheduled for 2008 and 2009.
Lear said in a statement it expects core earnings of about $750 million this year, compared with its previous outlook of $680 million.
The automotive seating supplier said it increased its outlook because of stronger-than-expected production schedules in North America in the fourth quarter and benefits from restructuring.
But Lear said it now expects to incur about $180 million in restructuring costs this year, an increase of $55 million from the previous estimate.
The increase is related to the decision to accelerate plant closings in Canada and western Europe.
Lear did not identify specific plants in its statement.
The supplier also reaffirmed its outlook for 2008 and said it expects core operating earnings of about $680 million, even though some of its customers have announced production cuts.
Lear said it is optimistic about next year because of sales growth in markets outside of North America and savings from restructuring.
Lear, of suburban Detroit, ranks No. 7 on the Automotive News list of the top 100 global suppliers with worldwide original-equipment automotive parts sales of $17.84 billion in 2006.