Analyst Note| Richard Hilgert |
Narrow-moat-rated Lear reported fourth-quarter earnings per share before special items of $2.81, beating the $2.57 FactSet consensus estimate by $0.24 and climbing $1.59 from $1.22 EPS reported a year ago when the chip crunch was much worse. Results continue to be impacted by customer production shutdowns but to a lesser degree from China's COVID-19 resurgence, the chip crunch, and the Ukraine crisis, which caused supply chain disruption. Revenue increased 10% to $5.4 billion from $4.9 billion last year, better than consensus by 2%. Excluding currency and acquisitions, organic revenue rose 13%, 7% above the 6% increase in global light vehicle production adjusted to Lear’s customer base. Revenue growth was supported by new business backlog, higher customer production, and customer cost recoveries.