Lear Reports 4Q Beat, Deutsche Bank Leaves Estimates Unchanged

Deutsche Bank has published a research report on Lear Corporation (NYSE: LEA) after the company exceeded analyst expectations in its 4Q, allowing Deutsche Bank to leave its estimates unchanged.

In the report, Deutsche Bank writes that "Lear's Q4 exceeded our estimates. Revenue of $3.2 bn compared with our $2.9 bn est. Regional growth exceeded industry production changes, with North American revenue increasing 17% yoy compared to 7% production growth. European revenue increased 9% yoy compared to a 1% yoy increase in Western European production. Gross profit was slightly better than expected, at $255 MM vs. our $249 MM est. (though gross margin was 8.1% vs. our 8.6% estimate; likely affected by launch costs on new business). Operating income came in at $150MM vs. our $127 MM estimate, with much of the upside attributable to lower than expected SG&A. Total company EBIT margin was 4.7% vs. our 4.4% estimate; incremental operating margin was 8.3% vs. our 6.6% est. EBITDA was $211 MM vs. our $191 MM estimate. Reported tax rate was lower than expected, and EPS was $2.38 vs. our $1.63. Free cash flow for the quarter was $160 MM vs. our $79 MM estimate, resulting in a year-end cash position of $1.654 bn (vs. our $1.592 bn estimate)."

Deutsche Bank maintains its Buy rating and $135 price target.

Lear Corporation closed yesterday at $105.63.