Lear cuts 2026 sales outlook, keeps earnings guidance

Lear Corporation (LEA) said on Oct. 30 that adjusted earnings per share for the third quarter of 2026 were $3.71, topping the $3.40 consensus estimate compiled by Finnhub. The company also lowered its full-year sales forecast.

Sales were $5.77 billion, up 2% from $5.68 billion a year earlier. That was below the $5.87 billion consensus estimate compiled by Finnhub.

Shares were little changed in regular-session trading as of 9:39 a.m. ET, from a regular-session close of $117.38.

Here's how the company did:

• Adjusted EPS: $3.71 vs. $2.79 a year earlier, against $3.40 expected, according to Finnhub
• Revenue: $5.77 billion vs. $5.68 billion a year earlier, against $5.87 billion expected, according to Finnhub
• Diluted EPS: $2.74 vs. $2.02 a year earlier
• Core operating earnings: $256 million vs. $241 million a year earlier

The company said the gains reflected higher earnings and the benefit of its share repurchase program. Adjusted net income rose 23% to $185 million, from $150 million.

Guidance changes

The company said it adjusted its 2026 outlook to reflect changing production schedules for key platforms. Net sales are now expected at $23.35 billion to $23.75 billion, down from $23.54 billion to $24.01 billion.

Core operating earnings guidance stays at $1.08 billion to $1.20 billion, and adjusted EBITDA stays at $1.70 billion to $1.82 billion. Lear said it expects its restructuring actions to offset the impact of lower revenue and higher commodity and other input costs.

Restructuring costs are now about $200 million, up from about $175 million. Operating cash flow is forecast at $1.23 billion to $1.33 billion, down from $1.25 billion to $1.35 billion. Free cash flow is forecast at $565 million to $665 million, down from $590 million to $690 million.

The outlook assumes full-year global industry production about 1% lower than in 2025 on a Lear sales-weighted basis, compared with the 2% decline assumed in July.

Segment and cash results

Seating net sales were $4.33 billion, and its adjusted segment margin was 6.3% of sales, up from 6.1% a year earlier. E-Systems net sales were $1.45 billion, with an adjusted segment margin of 4.8%, up from 4.2%.

Net cash from operating activities was $329 million, down from $444 million a year earlier. Free cash flow was $158 million, down from $307 million. Cash and cash equivalents at quarter-end were $889 million, and total liquidity was $2.9 billion.

Share repurchases

Lear repurchased $175 million of shares in the quarter, which the company said met its full-year target of $350 million. The company also paid $38 million in dividends.

The company expanded its share repurchase authorization to $1.5 billion, extended through Dec. 31, 2029.

“We remain committed to returning cash to shareholders,” President and Chief Executive Officer Ray Scott said, “as demonstrated by our expanded share repurchase authorization to $1.5 billion, which has been extended through December 31, 2029.”