Lear Beats Estimates on Top and Bottom Lines

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Lear (NYS: LEA) reported earnings on Feb. 2. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Lear beat slightly on revenue and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue grew and GAAP earnings per share shrank.

Margins dropped across the board.

Revenue details
Lear tallied revenue of $3.51 billion. The 11 analysts polled by S&P Capital IQ expected to see revenue of $3.47 billion. Sales were 11% higher than the prior-year quarter's $3.16 billion.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.

EPS details
Non-GAAP EPS came in at $1.26. The 15 earnings estimates compiled by S&P Capital IQ anticipated $1.18 per share on the same basis. GAAP EPS of $1.03 for Q4 were 4.6% lower than the prior-year quarter's $1.08 per share.

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Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 6.9%, 280 basis points worse than the prior-year quarter. Operating margin was 2.9%, 340 basis points worse than the prior-year quarter. Net margin was 3.0%, 70 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $3.57 billion. On the bottom line, the average EPS estimate is $1.30.

Next year's average estimate for revenue is $14.50 billion. The average EPS estimate is $5.27.

Investor sentiment
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 71 members out of 73 rating the stock outperform, and two members rating it underperform. Among 26 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), all of them give Lear a green thumbs-up.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Lear is outperform, with an average price target of $62.00.

At the time this article was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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