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Lear Corp Q2 Net Falls Despite Rising Sales; Beats Estimates; Narrows Fiscal 2022 Outlook

Lear Corporation (LEA), a global automotive technology leader in Seating and E-Systems, on Tuesday reported results for the second quarter of 2022 that showed net income falling despite rising sales revenues. Earnings and revenues however exceeded analysts' expectations.

Net income for the three-month period dropped to $68.5 million or $1.14 per share as compared to $175.2 million or $2.89 per share in the corresponding period of the previous financial year. The comparative dip is largely attributed to a $47 million favorable indirect tax ruling in a foreign jurisdiction in the second quarter of 2021 as well as the higher commodity costs and foreign exchange impact in the second quarter of 2022.

Excluding items, earnings declined to $107.4 million or $1.79 per share from $148.3 million or $2.45 per share in the year-ago period.

15 analysts polled by Thomson Reuters were expecting the company to report revenues of $1.44 per share. Analysts typically exclude one-time items.

Net sales for the period, however, improved 7 percent to $5.1 billion, from $4.8 billion in the year-ago quarter.

14 analysts polled by Thomson-Reuters were expecting the company to report revenues of $5.02 billion during the quarter.

The company has narrowed its outlook for fiscal 2022. Net sales expectation is now between $20.55 billion and $21.05 billion, versus the $20.4 billion to $21.2 billion range seen earlier. Core operating earnings is seen between $815 million and $915 million versus the $765 million - $965 million range seen earlier. Adjusted EBITDA is expected between $1.405 and $1.505 billion as compared to the earlier expectation between $1.365 billion and $1.565 billion.

Shares of Lear Corp closed Monday's trading at $151.36. up $0.22 or 0.15 percent from the previous close.

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