Lear sees Q3 revenue $5.5B, consensus $5.65B

While presenting last night at the Morgan Stanley 12th Annual Laguna Conference, Jason Cardew, Senior Vice President and Chief Financial Officer of Lear (LEA), stated: “In terms of the third quarter, specifically in the way it’s developed and you know, when we had our second quarter earnings call and revised our guidance, we had visibility to a series of customer production, reductions and we kind of extended those out into the fourth quarter, made some assumptions that we felt like at the time we were pretty conservative. You know, so it is a big customer of ours in North America and Europe and, you know, they were cutting production to realign their inventory levels. GM had provided a new EV production target, which we had further discuss a little bit in our guidance. And Volvo is an important customer for us in both Seating and E-systems. We have a launch of the EX90 and the Polestar 3 program here in North America. We have lowered our volumes associated with that. So, we felt like we had really a balanced set of assumptions in our guidance. We are seeing, you know, further deterioration in the production volumes here in the third quarter. We’re now expecting revenue in the third quarter to be $5.5 billion. We didn’t provide Q3 guidance specifically on the earnings call, but that’s about $150 million lower than what we had anticipated when we did issue our full-year guidance. Operating margins are holding up in both segments, so the performance side is holding together pretty well. We expect E-systems margins to be about 5% in the quarter and Seating margins to be about about 6% in the third quarter. In terms of the full-year, I think that the $150 million reduction in sales kind of works its way into the full-year number as well. And so we’re as we sit here today, we would probably see revenue between the midpoint and low end of our guidance range. And we see operating margins sort of in line with the midpoint of our guidance range.”