Second Quarter 2026
Filed Jul 31, 2026Lear Reports Second Quarter 2026 Results; Raises Full-Year Guidance
Revenue, core operating earnings, net income, earnings per share, operating cash flow and free cash flow increased year-over-year, while the company raised the midpoints of its full-year 2026 outlook.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Reported SalesGAAP | $6,209.4 million | – | 3% |
| Net incomeGAAP | $192.8 million | – | 17% |
| Earnings per shareGAAP | $3.79 | – | 24% |
| Core operating earningsnon-GAAP | $313.2 million | – | 7% |
| Core operating earnings marginnon-GAAP | 5.0% of sales | – | – |
| Adjusted net incomenon-GAAP | $217.4 million | – | 16% |
| Adjusted earnings per sharenon-GAAP | $4.28 | – | 23% |
| Net cash provided by operating activitiesGAAP | $461 million | – | 55% |
| Free cash flownon-GAAP | $288 million | – | 69% |
| Seating segment marginother | 6.2% of sales | – | – |
| Seating segment adjusted marginnon-GAAP | 6.7% of sales | – | flat |
| E-Systems segment marginother | 5.4% of sales | – | – |
| E-Systems segment adjusted marginnon-GAAP | 5.8% of sales | – | – |
| Cash and cash equivalents at quarter-endother | $1.0 billion | – | – |
| Total liquidityother | $3.0 billion | – | – |
| Global vehicle productionother | flat | – | flat compared to a year ago |
| North America vehicle productionother | flat | – | flat |
| Europe vehicle productionother | down 2% | – | down 2% |
| China vehicle productionother | down 4% | – | down 4% |
| Lear sales-weighted global vehicle productionother | down approximately 1% | – | down approximately 1% |
Full Year 2026 outlook
- Revenue$23,540 million - $24,010 million
- NoteCore Operating Earnings $1,080 million - $1,200 million
- NoteAdjusted EBITDA $1,700 million - $1,820 million
- NoteRestructuring Costs ≈$175 million
- NoteOperating Cash Flow $1,250 million - $1,350 million
- NoteCapital Spending ≈$660 million
- NoteFree Cash Flow $590 million - $690 million
- Noteglobal industry production will decrease approximately 2% from 2025 on a Lear sales-weighted basis
- Notefull year average exchange rates of $1.16/Euro and 6.82 RMB/$
Capital returns
- Repurchased $100 million of shares and paid $39 million in dividends
- Lear repurchased 735,873 shares of our common stock for a total of $100 million.
- remaining share repurchase authorization of approximately $600 million
- Since initiating the share repurchase program in 2011, we have repurchased 63.6 million shares of our common stock for a total of $6.1 billion at an average price of $95.72 per share.
- This represents a reduction of approximately 60% of our shares outstanding since the time we began the program.
What drove it
- Sales excluding the impact of 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.
- Core operating earnings were impacted by the addition of new business and changes in foreign exchange rates, offset by lower production on key Lear platforms.
- Lear cited significant new and conquest awards with Audi for complete seats, ComfortFlex and FlexAir in Europe and North America, and a complete seat award with Leapmotor in South America.
- Lear cited E-Systems awards for wire with a luxury Chinese automaker and BAIC in China, Renault in Europe, and Stellantis in North America.
- The company opened its Advanced Manufacturing Integration Center in Rochester Hills, Michigan.
Concerns
- Global vehicle production was flat compared to a year ago, while Europe was down 2% and China was down 4%.
- Global vehicle production was down approximately 1% on a Lear sales-weighted basis.
- Lower production on key Lear platforms partially offset commercial recoveries and new business.
- The outlook excludes any future impact of potential changes to tariffs or Company or industry-wide production disruptions.
- The financial outlook assumes global industry production will decrease approximately 2% from 2025 on a Lear sales-weighted basis.
What to watch
- Execution against the Full Year 2026 Net Sales outlook of $23,540 million - $24,010 million.
- Delivery of Full Year 2026 Core Operating Earnings of $1,080 million - $1,200 million and Free Cash Flow of $590 million - $690 million.
- The effect of lower production on key Lear platforms and the assumed decrease in global industry production.
- Margin performance in Seating, where adjusted margin was 6.7% of sales, and E-Systems, where adjusted margin was 5.8% of sales.
- The pace of repurchases under the approximately $600 million remaining authorization.
Balance sheet and cash flow
- Cash and cash equivalents at quarter-end of $1.0 billion
- total liquidity of $3.0 billion
- Net cash provided by operating activities was $461 million
- free cash flow was $288 million
Analysis
Lear reported second-quarter 2026 sales of $6,209.4 million, up 3% from $6,030.4 million, despite global vehicle production being flat and down approximately 1% on a Lear sales-weighted basis. Sales excluding commodities, foreign exchange and tariff recoveries were up 1%. The company attributed that underlying growth to commercial recoveries and new business, partly offset by lower production on key Lear platforms.
Profitability improved. Core operating earnings rose 7% to $313.2 million, and core operating earnings margin increased to 5.0% of sales from 4.8% of sales. Net income increased 17% to $192.8 million, while adjusted net income increased 16% to $217.4 million. GAAP earnings per share rose 24% to $3.79 and adjusted earnings per share rose 23% to $4.28, with the company citing higher earnings and the benefit of its share repurchase program.
Segment margin performance was divergent. Seating margin was 6.2% of sales versus 6.4%, while Seating adjusted margin was flat at 6.7% of sales. E-Systems margin increased to 5.4% of sales from 3.5%, and E-Systems adjusted margin increased to 5.8% of sales from 4.9%. The company highlighted new Seating and E-Systems awards, including Audi, Leapmotor, BAIC, Renault and Stellantis, as well as progress with Chinese automakers.
Cash generation strengthened materially, with net cash provided by operating activities of $461 million and free cash flow of $288 million, compared with $296 million and $171 million, respectively. Lear repurchased 735,873 shares for $100 million, paid $39 million in dividends, and ended the quarter with $1.0 billion of cash and cash equivalents and $3.0 billion of total liquidity. The company raised the midpoints and narrowed the ranges of its 2026 outlook across most metrics, while retaining assumptions for declining industry production and excluding future tariff changes or production disruptions.
Management, verbatim
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 us the confidence to raise our full-year guidance.
Ray Scott, President and Chief Executive Officer
Our strong cash generation enabled us to further increase the pace of share repurchases, driving strong earnings per share growth while sustaining our dividend.
Ray Scott, President and Chief Executive Officer
Not in the filing
stated, not guessed- Period-end date
- Seating segment revenue
- E-Systems segment revenue
- Total gross margin
- Operating income reported under GAAP
- Debt balance
- Prior-quarter comparisons for reported metrics
- Full Year 2026 gross margin guidance
- Full Year 2026 operating expenses guidance
- Full Year 2026 tax rate guidance
- Previous-release outlook for comparison with actual results
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.