DETROIT -- Lear Corp. said Friday that the six-week UAW strike against General Motors would substantially impact its 2019 financial results and, as a result, the supplier lowered its full-year financial outlook.
The suburban Detroit seating and electronic systems supplier said its third-quarter net income fell nearly 15 percent to $216 million, down from $253 million in the same period last year.
GM is Lear's largest customer, accounting for 18 percent of the supplier's business in 2018, according to Lear's annual 10-K report filed with U.S. regulators.
Lear CEO Ray Scott said in a call with investors that the strike represents $525 million of lost revenue for the supplier.
"Each week of the strike now is $70 [million to] $75 million of lost revenue," Scott said.
The supplier forecasts total 2019 adjusted net income between $765 million and $845 million and revenue of between $19 billion and $19.5 billion. Lear previously forecast a total adjusted net income between $885 million and $965 million and revenue of between $19.8 billion and $20.3 billion.
Lear shares closed Friday's trading up 2.3 percent to $124.22.
Lear's 2019 outlook was updated primarily due to the estimated impact of the strike, according to Jason Cardew, Lear vice president of finance and incoming CFO.
Voting on the tentative agreement is set to wrap up Friday afternoon, and an unofficial tally compiled by Automotive News shows the votes so far favoring ratification.
"If the vote had been completed on the GM strike prior to issuing our guidance, this would have been a little different conversation," Scott said.
Lear's revenue was $4.83 billion, down 1 percent from $4.89 billion in the same period last year.
This reflected lower production and net foreign exchange rate fluctuations, the company said in a statement.
"We have experienced significant lost volume from the strike," Cardew said. "The strike will materially affect our 2019 financial results. We are taking aggressive steps to mitigate that impact."
The strike has had an impact on several other major suppliers, including Nemak, Adient and Faurecia. GM and the UAW have reached a tentative deal for a new four-year labor contract. Ratification voting is expected to conclude Friday.
Scott said he did not have all the details on how GM would regain lost volume and ramp production back up.
On the plus side, Lear said its plan for new areas of growth within e-systems has been progressing.
Lear, of Southfield, Mich., ranked No. 8 on the Automotive News list of the top 100 global suppliers, with worldwide sales to automakers of $21.15 billion in 2018.
