Lear Corp. posts record profit boosted by acquisitions, new US tax law
Automotive seating and electrical systems supplier Lear Corp. reported strong quarterly profit and record full year earnings led by higher sales in Europe and Africa and the acquisition of Grupo Antolin’s seating business.
Its fourth-quarter profit jumped 74% to US$ 400.5 million, or US$ 5.80 a share, an increase from US$ 229.9 million, or US$ 3.24 a share, for the same quarter a year before. Adjusted earnings were US$ 4.38 a share.
Regarding full year 2017 results, the company posted a record net income of US$ 1,313 million and record adjusted net income of US$ 1,178 million, compared to US$ 975 million and US$ 1,026 million, respectively, in the prior year.
In the fourth quarter, the company had a one-time net tax benefit of US$ 146 million related to the new tax law.
The net benefit results from a US$ 290 million gain from foreign tax credit due to the repatriation of certain foreign earnings and US$ 30 million of other tax benefits, offset by a US$ 131 million one-time tax on accumulated foreign earnings and US$ 43 million of tax expenses to reflect the new corporate tax rate and other changes to deferred tax accounts.
Sales rose 16% to US$ 5.36 billion in the fourth quarter and totaled a record US$ 20.5 billion during the full year, up 10% if compared to 2016 total sales. Sales in 2018 are expected to be between US$ 21.4 billion and US$ 21.6 billion.
Lear operates 46 plants in Mexico. During the last four years the company has opened 12 plants in the country. The auto supplier estimates its Mexican workforce totaled 56,000 employees by the end of 2017.