LEAR CORPORATION Sees Revenue Growth Despite UAW Strike, Margin Improvement Dented by Headwinds

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LEAR CORPORATION ($NYSE:LEA), a global automotive technology leader in seating, electrical, and electronic solutions for the automotive industry, recently reported revenue growth despite a strike by the United Auto Workers union (UAW).

However, the margin improvement was hindered by a number of headwinds.

Additionally, higher commodity prices and unfavorable foreign exchange rates weighed on the company’s margins. The company remains committed to its long-term growth strategy to capitalize on opportunities in emerging markets and continue to invest in innovative solutions for its customers. Overall, Lear Corporation’s strong revenue growth despite a UAW strike is a positive sign for the company’s future prospects. However, headwinds such as commodity price increases and unfavorable foreign exchange rates will continue to affect its margin improvements in the near term.

Earnings

The earning report of LEAR CORPORATION as of September 30 2021 reported a total revenue of 4268.2M USD, which is 18.6% lower than the same period last year. Net income has decreased 128.7% year-over-year to 26.5M USD. Despite the decrease in revenues and net income, LEAR CORPORATION has seen an overall growth in revenues, with total revenue increasing from 4268.2M USD to 5781.0M USD in the last 3 fiscal years.

The decrease in both total revenue and net income has been attributed to the UAW strike that took place in the fall. The strike caused a headwind that dented the margin improvement of LEAR CORPORATION, and resulted in the decline in revenues and net income reported in FY2023 Q3.

About the Company

Income Snapshot

Below shows the total revenue, net income and net margin for Lear Corporation. More…

Cash Flow Snapshot

Below shows the cash from operations, investing and financing for Lear Corporation. More…

Balance Sheet Snapshot

Below shows the total assets, liabilities and book value per share for Lear Corporation. More…

Key Ratios Snapshot

Some of the financial key ratios for Lear Corporation are shown below. More…

Share Price

On Tuesday, LEAR CORPORATION saw an increase in its stock price, with shares opening at $128.1 and closing at $129.8, representing a 1.2% increase from the previous closing price of 128.2. Despite being affected by the recent UAW strike, the corporation managed to experience revenue growth despite the headwinds. However, margins for the company were dented as a result of the strike, though it was not sufficient to offset the overall increase in revenue. The company’s improved performance is a testament to its resilience and success in the automotive industry. Live Quote…

Analysis

At GoodWhale, we conducted an analysis of LEAR CORPORATION‘s financials and found that according to Star Chart, LEAR CORPORATION has a high health score of 9/10 due to its ability to pay off debt and fund future operations. We observe that LEAR CORPORATION is strong in asset, dividend, and medium in growth and profitability. Based on our analysis, we classify LEAR CORPORATION as a ‘cheetah’, a type of company that achieved high revenue or earnings growth but is considered less stable due to lower profitability. Investors who are looking for a company that has demonstrated strong growth, but is considered less stable due to lower profitability may be interested in LEAR CORPORATION. They may also be looking for a company with a high health score, strong asset and dividend capabilities, and moderate growth and profitability. More…

Peers

In the automotive industry, suppliers of parts and systems are constantly vying for business from the major carmakers. Two of the biggest players in this space are Lear Corporation and Ningbo Joyson Electronic Corporation. Both companies are based in China and have a long history of supplying carmakers with everything from seats and electrical systems to instrument panels and body control modules. While Lear is the bigger company, with annual sales of around $19 billion, Ningbo Joyson is no slouch, with sales of $7.4 billion. The two companies are constantly jockeying for position in the market, with each trying to undercut the other on price while also offering better quality and more innovative products. The competition between these two companies is fierce, but it is also healthy, as it helps to keep both companies on their toes and provides carmakers with a choice of two very competent suppliers.

– Ningbo Joyson Electronic Corp ($SHSE:600699)

Ningbo Joyson Electronic Corp is a Chinese multinational automotive electronic components company headquartered in Ningbo, Zhejiang. The company has a market cap of 21.55B as of 2022 and a Return on Equity of -18.07%. The company manufactures and supplies automotive electronic components and systems for vehicles worldwide. Its products include airbags, seatbelts, steering wheels, instrument panels, door modules, and other safety-related products.

– Denso Corp ($TSE:6902)

Denso Corp is a Japanese company that manufactures automotive components and systems. It has a market cap of 5.37 trillion as of 2022 and a return on equity of 5.0%. The company produces a wide range of products including engine components, electrical components, and air conditioning systems. It also provides services such as engineering, design, and testing. Denso is a leading supplier of components to the automotive industry.

– Aptiv PLC ($NYSE:APTV)

Aptiv PLC is a global technology company that develops safer, greener and more connected solutions that enable the future of mobility. The company has a market cap of 22.94B as of 2022 and a Return on Equity of 4.8%. Aptiv’s products are used in a variety of vehicles, including cars, trucks, buses and trains. The company’s products are designed to make vehicles safer, more efficient and more connected.

Summary

However, their earnings were not as good as expected due to a number of headwinds. Margins were impacted by rising raw material costs and increased investments in digital capabilities. Despite the UAW strike, the company was able to maintain strong production levels and keep customers satisfied.

Lear is now focused on global expansion and cost optimization. It is also investing heavily in new product development and developing cutting edge technologies that will help it remain competitive in the future.