Lear said Tuesday that it expects full-year revenue in the range of $20.55 billion to $21.05 billion.
Seating and electronics supplier Lear Corp. reported improved financial performance in the third quarter, fueled by better market conditions.
Lear said net income increased 440 percent from a year ago to $92 million in the third quarter, while sales rose 23 percent to $5.2 billion, due primarily to improved production volumes.
Core operating earnings increased 140 percent to $235 million for the quarter, according to the automotive seating supplier's earnings presentation Tuesday.
All of that was aided by global car production that increased 29 percent year-over-year to 20.8 million units, while U.S. production increased 24 percent to 3.7 million units.
"Our financial returns in seating lead the industry," CEO Ray Scott said in a call with investors. "Electrification and other added content in the vehicle will drive growth in e-systems. As we work through the challenging industry conditions, we are proactively taking steps to position Lear for future success."
Shares in Lear fell 3.7 percent to close Tuesday at $133.56.
Suppliers struggling
While production has stabilized compared with a year ago, the supply base is still struggling with surprise shutdowns and inflation, CFO Jason Cardew said on the call.
"While we did see a modest improvement in the stability of customer production in the third quarter, industry conditions remain challenging, including the continuation of short notice down time announcements from customers in all regions," he said.
Cost recovery negotiations with automakers are ongoing and have been constructive in most cases, Scott said. Most customers have moved to implement long-term solutions for commodity cost increases.
"The majority of the customers were of the mindset that these were more transitory and kind of wait-and-see on getting some of these things resolved, where I believe right now the majority of our customers are more in line with a general policy and guidelines for how they'll resolve it," he said.
Cutting costs
Meanwhile, Lear has worked to reduce its labor costs. The company, which employs more than 160,000 people globally, said it cut headcount by 7,700 people earlier this year as net income plunged.
The supplier is making headway in expanding its E-Systems business, which won a contract to supply General Motors with battery disconnect units through 2030. The contract spurred plans for a new $80 million plant in Michigan.
Lear said it achieved $400 million of new EV business wins this year and has a "clear path" to $1.3 billion of annual EV revenue by 2025.
"We continue to focus our efforts on operational efficiencies, developing innovative solutions for our customers, and increasing earnings and cash flow," Scott said in a news release.
Lear, based in suburban Detroit, ranks No. 10 on the Automotive News list of the top 100 global suppliers with worldwide sales to automakers of $19.3 billion in 2021.
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