Key Highlights

  • Sales rose 2% to USD 5.8 billion despite global industry production falling 2% on a Lear-weighted basis.
  • Core operating Earnings were USD 256 million, up 6%, the fourth straight quarter of year-over-year improvement.
  • Adjusted EPS was USD 3.71 versus USD 2.79, helped by USD 175 million of share repurchases in the quarter.
  • Lear increased its share repurchase authorization to USD 1.5 billion and extended it through 2029.

Earnings Gain on Stable Sales

Lear Corporation (NYSE:LEA) reported third-quarter 2026 sales of USD 5.8 billion, up 2%, against a 2% decline in Lear-weighted global industry production. Core operating earnings were USD 256 million, up 6%. Adjusted Earnings Per Share reached USD 3.71, up 33% from USD 2.79 in the third quarter of 2025, aided by repurchases. The quarter marked the fourth consecutive period of year-over-year improvement in core operating earnings.

Operating cash flow was USD 329 million versus USD 444 million, reflecting higher tooling and engineering Investment and Working Capital timing, and free cash flow was USD 158 million.

Awards, Savings and Buybacks

The company repurchased USD 175 million of shares, completing its full-year target of USD 350 million, and raised its authorization to USD 1.5 billion through 2029. Year-to-date net Business awards total about USD 3.9 billion, including about USD 3.1 billion in Seating and USD 800 million in E-Systems, an increase of USD 1 billion in the quarter. Over half of Seating awards and about 70% of E-Systems awards are new or conquest programs, including conquest wins with Stellantis in Europe and Honda in Thailand, and the rollout of thermal comfort modular solutions continues to gain momentum.

Seating awards year to date are estimated to generate over USD 600 million of average annual revenue, up almost 90% from the second-quarter level, reflecting wins with Chinese automakers including BYD in Thailand and Indonesia. About 25% of E-Systems awards are with Chinese domestic automakers.

Restructuring savings reached about USD 55 million year to date against a USD 75 million target. Seating generated 30 basis points of net performance through three quarters, with a full-year target of 40, and E-Systems delivered 105 basis points.

Outlook

Lear reduced its 2026 net sales outlook to reflect updated production and currency assumptions, but maintained its core operating earnings outlook, noting that execution, restructuring savings and anticipated resolution of commercial negotiations offset lower volumes and rising Commodity and input costs. Restructuring cost guidance rose by USD 25 million. The outlook assumes global industry production down 1% on a Lear-weighted basis, an average euro rate of USD 1.15 and a Chinese renminbi rate of 6.80 per dollar, and no change in Tariff policy.

Operating Indicators to Follow

Production begins next year at the Orion, Michigan seating Facility serving the Cadillac Escalade, Chevrolet Silverado and GMC Sierra, where automation is projected to reduce conversion costs by 10% to 15%. The Orion facility is described as a blueprint to scale across the global seating footprint for programs such as the Ford Super Duty. The chief financial officer is retiring after more than 34 years with the company. Items to watch include commodity costs, China production and the fourth-quarter net performance step-up.