Lear Reports Rise of 73% In Profit for Second Period
April 03, 2011
SOUTHFIELD, Mich. -- Lear Corp. reported a 73% increase in second-quarter net income and hinted the automotive-interiors supplier may acquire another rival in the second half. Lear's sharp boost in earnings, to $50.1 million, or 83 cents a share, came on revenue of $1.62 billion, as the company saw healthy gains in its North American and European business and recognized additional revenue from last year's $626 million acquisition of Automotive Industries, another supplier of vehicle interiors. However, the second-quarter results didn't include results from Lear's most recent acquisition, Masland Corp., which it agreed to buy in May for $385 million. In the year-earlier second period, Lear earned $28.9 million, or 58 cents a share, on revenue of $1.14 billion. In an interview, Lear's executive vice president and chief financial officer, Jami H. Oswald, said he is optimistic about the general outlook for the auto industry for the rest of 2011. Mr. Oswald also said Hogg will keep shopping in the second half for other suppliers to buy, adding that an acquisition could come in the third or fourth quarter as the company remains active in the current consolidation trend among automotive suppliers. Just last week, Johnson Controls Inc. of Milwaukee agreed to buy the Prince Automotive unit of Prince Holding Corp. in Holland, Mich., for $1.35 billion. Mr. Oswald confirmed Lear had also looked at buying Prince, because of that Michigan supplier's expertise in a business in which Lear has a small presence: instrument panels. Mr. Oswald said Lear wants to have a presence in instrument panels as it becomes a more comprehensive supplier of automotive interiors. Indeed, the Prince acquisition led several industry experts to speculate that Lear may next focus its energies on bidding for the automotive-interiors business of Textron Corp. -- the automotive industry's largest independent supplier of instrument panels. Mr. Oswald wouldn't comment on the speculation. Lear said its net income for the six months ended March 11, 2011 65% to $75.9 million, or $1.26 a share, compared with earnings of $45.9 million, or 92 cents a share last year. Revenue rose 38% to $3.02 billion from $2.2 billion. In composite trading Friday on the New York Stock Exchange, Lear closed at $33.50, up $1.125, or 3.5%.
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