Earnings

Lear Raises 2026 Outlook After Second-Quarter Profit Lift

The Tip Desk · July 31, 2026 · 3 min read

Core operating earnings reached $313 million, up 7% from a year earlier, as the company lifted the midpoints of its full-year 2026 outlook.

Lear Corporation (LEA), a global automotive technology leader in Seating and E-Systems, raised the midpoints of its 2026 financial outlook after a second quarter in which core operating earnings reached $313 million, up 7% from $292 million a year earlier.

The company increased the midpoints and narrowed the ranges of its 2026 outlook across most metrics. At the midpoint of the new range, it assumed global industry production would decrease approximately 2% from 2025 on a Lear sales-weighted basis. The outlook excludes any future impact of potential changes to tariffs or company- or industry-wide production disruptions.

Full-year net sales are now guided at $23,540 million to $24,010 million, core operating earnings at $1,080 million to $1,200 million, and adjusted EBITDA at $1,700 million to $1,820 million. Operating cash flow is expected at $1,250 million to $1,350 million, with free cash flow of $590 million to $690 million. Restructuring costs are estimated at about $175 million and capital spending at about $660 million. The outlook assumes full-year average exchange rates of $1.16 per euro and 6.82 RMB per dollar.

Sales in the second quarter were $6.2 billion, up 3% from $6.0 billion in the second quarter of 2025. Sales excluding commodities, foreign exchange and tariff recoveries were up 1%, reflecting commercial recoveries and the addition of new business, partially offset by lower production on key Lear platforms. Global vehicle production was flat compared with a year ago, with North America flat, Europe down 2% and China down 4%. On a Lear sales-weighted basis, global vehicle production was down approximately 1%.

Core operating earnings were 5.0% of sales, compared with 4.8% of sales in 2025. Net income was $193 million, up 17% from $165 million. Adjusted net income was $217 million. Earnings per share were $3.79 and adjusted earnings per share were $4.28, up 24% and 23% year over year, respectively, reflecting higher earnings and the benefit of its share repurchase program.

Seating net sales were $4,624.1 million. Segment margins were 6.2% of sales and adjusted segment margins were 6.7%. E-Systems net sales were $1,585.3 million. Segment margins were 5.4% of sales and adjusted segment margins were 5.8%.

President and Chief Executive Officer Ray Scott said Lear continued its strong start to 2026 despite a dynamic operating environment, delivering improved year-over-year revenue and operating income in both segments, results that give the company confidence to raise full-year guidance. He cited new and conquest awards with Audi for complete seats, ComfortFlex and FlexAir in Europe and North America, a complete seat award with Leapmotor in South America, and being named the 2025 General Motors Supplier of the Year. E-Systems awards included wire with a luxury Chinese automaker and BAIC in China, a replacement and partial conquest award for low- and high-voltage wire with Renault in Europe, and new awards with Stellantis in North America.

Net cash provided by operating activities was $461 million and free cash flow was $288 million. The company repurchased $100 million of shares, including 735,873 shares, and paid $39 million in dividends. Remaining share-repurchase authorization was approximately $600 million, or about 8% of total market capitalization at current prices. Cash and cash equivalents were $1.0 billion and total liquidity was $3.0 billion.

North America sales were $2,498.4 million, Europe and Africa $2,326.4 million, Asia $1,125.4 million and South America $259.2 million. Content per vehicle was $633 in North America and $517 in Europe and Africa.

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