LEA

Lear (LEA) is expected to deliver a year-over-year increase in earnings on higher revenues when it reports results for the quarter ended September 2026. This widely-known consensus outlook gives a good sense of the company's earnings picture, but how the actual results compare to these estimates is a powerful factor that could impact its near-term stock price. The earnings report, which is expected to be released on October 30, might help the stock move higher if these key numbers are better than expectations. On the other hand, if they miss, the stock may move lower. While the sustainability of the immediate price change and future earnings expectations will mostly depend on management's discussion of business conditions on the earnings call, it's worth handicapping the probability of a positive EPS surprise. This automotive seating and electrical distribution systems company is expected to post quarterly earnings of $3.32 per share in its upcoming report, which represents a year-over-year change of +19%. Revenues are expected to be $5.78 billion, up 1.8% from the year-ago quarter. The consensus EPS estimate for the quarter has been revised 2.23% lower over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period. Investors should keep in mind that the direction of estimate revisions by each of the covering analysts may not always get reflected in the aggregate change. Price, Consensus and EPS Surprise Estimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. This insight is at the core of our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction). The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier. Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only. A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP. Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell). For Lear, the Most Accurate Estimate is lower than the Zacks Consensus Estimate, suggesting that analysts have recently become bearish on the company's earnings prospects. This has resulted in an Earnings ESP of -1.10%. On the other hand, the stock currently carries a Zacks Rank of #3. So, this combination makes it difficult to conclusively predict that Lear will beat the consensus EPS estimate. While calculating estimates for a company's future earnings, analysts often consider to what extent it has been able to match past consensus estimates. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number. For the last reported quarter, it was expected that Lear would post earnings of $3.89 per share when it actually produced earnings of $4.28, delivering a surprise of +10.03%. Over the last four quarters, the company has beaten consensus EPS estimates four times. An earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss. That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported. Lear doesn't appear a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release. Mobileye Global (MBLY), another stock in the Zacks Automotive - Original Equipment industry, is expected to report earnings per share of $0.1 for the quarter ended September 2026. This estimate points to a year-over-year change of +11.1%. Revenues for the quarter are expected to be $473.84 million, down 6% from the year-ago quarter. Over the last 30 days, the consensus EPS estimate for Mobileye has been revised 50% down to the current level. Nevertheless, the company now has an Earnings ESP of -7.35%, reflecting a lower Most Accurate Estimate. When combined with a Zacks Rank of #3 (Hold), this Earnings ESP makes it difficult to conclusively predict that Mobileye will beat the consensus EPS estimate. Over the last four quarters, the company surpassed consensus EPS estimates three times. Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Lear Corporation (LEA) : Free Stock Analysis Report Mobileye Global Inc. (MBLY) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Tesla TSLA is slated to release third-quarter 2026 results on Oct. 21, after the closing bell. The company's automotive business remains a key focus as vehicle deliveries show mixed trends, with year-over-year declines despite a sequential increase. Tesla's ability to sustain vehicle demand, manage costs and improve profitability will be important factors. TSLA missed earnings estimates in two of the trailing four quarters, with the average negative surprise being 3.7%. Tesla, Inc. price-consensus-eps-surprise-chart | Tesla, Inc. Quote Tesla's second-quarter production totaled 451,758 vehicles (442,936 Model 3/Y and 8,822 other models), up 10% year over year. The company delivered 480,126 vehicles worldwide, up 25% from 384,122 units in the year-ago quarter, setting a record for second-quarter deliveries. Model 3/Y deliveries rose 25% year over year to 467,762 units, while deliveries of other models increased 19% to 12,364 units. Total automotive revenues of $20.5 billion rose 23% year over year. Automotive sales, excluding revenues from leasing and regulatory credits, totaled $20 billion, while automotive regulatory credit revenue declined to $146 million from $439 million in the year-ago quarter. Automotive gross margin excluding regulatory credits was 16.3% compared with 15% a year earlier and 19.2% in the preceding quarter. Tesla's third-quarter delivery report provides an early indication of automotive demand ahead of its earnings release. The company delivered 486,532 vehicles in the third quarter, up from 480,126 in the second quarter, but down 2.1% year over year. Model 3/Y deliveries reached 478,237 units, while deliveries of other models totaled 8,295. Production was 464,391 vehicles, below deliveries for the quarter. Tesla cautioned that vehicle deliveries alone do not determine quarterly financial results, which also depend on average selling prices, cost of sales, foreign-exchange movements and other factors. In its second-quarter 2026 update, the company said it remains focused on maximizing factory capacity utilization and growing vehicle sales through a differentiated product portfolio. Tesla also plans to optimize existing production capacity before building new factories and production lines. Competitive pressure in the electric vehicle market, production costs, changes in vehicle mix and average selling prices may affect revenue and margin growth. Our model predicts gross profit from automotive sales at $3.39 billion, down 0.6% from the year-ago quarter level. The company's ability to sustain customer demand while protecting automotive margins will therefore remain an important factor in assessing the segment's performance. The Zacks Consensus Estimate for third-quarter sales and earnings is pegged at $27.8 billion and 43 cents/share. The consensus mark for earnings per share has moved down by 3 cents over the past 30 days. Our proven model does not conclusively predict an earnings beat for Tesla, as it does not have the right combination of a positive Earnings ESP and a favorable Zacks Rank. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter. The company has an Earnings ESP of -11.35% and a Zacks Rank #4 (Sell) at present. Here are a few players from the auto space that, per our model, have the right ingredients to post an earnings beat this time. Garrett Motion Inc. GTX is slated to release third-quarter 2026 results on Oct. 22. The company has an Earnings ESP of +1.24% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for Garrett's to-be-reported quarter's earnings and revenues is pegged at 49 cents per share and $945.6 million. GTX surpassed earnings estimates in each of the trailing four quarters, with the average surprise being 16.76%. Rivian Automotive, Inc. RIVN is slated to release third-quarter 2026 results on Oct. 29. The company has an Earnings ESP of +7.38% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for Rivian's to-be-reported quarter's loss and revenues is pegged at 66 cents per share and $1.97 billion. RIVN surpassed earnings estimates in each of the trailing four quarters, with the average surprise being 15.14%. Lear Corporation LEA is slated to release third-quarter 2026 results on Oct. 30. The company has an Earnings ESP of +3.26% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for Lear's to-be-reported quarter's earnings and revenues is pegged at $3.28 per share and $5.8 billion. LEA surpassed earnings estimates in each of the trailing four quarters, with the average surprise being 13.49%. You can see the complete list of today's Zacks #1 Rank stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Tesla, Inc. (TSLA) : Free Stock Analysis Report Lear Corporation (LEA) : Free Stock Analysis Report Garrett Motion Inc. (GTX) : Free Stock Analysis Report Rivian Automotive, Inc. (RIVN) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Tesla TSLA is set to release third-quarter 2026 results on Oct. 21, after the closing bell. The Zacks Consensus Estimate for the to-be-reported quarter's earnings and revenues is pegged at 44 cents per share and $27.8 billion, respectively. The consensus mark for third-quarter earnings has declined 3 cents in the past 30 days. The estimate for the bottom line implies a 12% contraction from the year-ago levels. The Zacks Consensus Estimate for quarterly revenues suggests a year-over-year fall of 1%. In the second quarter of 2026, the company missed earnings estimates by 34%. In the trailing four quarters, Tesla missed earnings estimates twice and beat twice, with the average negative earnings surprise being 3.7%. Tesla, Inc. price-consensus-eps-surprise-chart | Tesla, Inc. Quote Tesla reported third-quarter 2026 deliveries of 486,532 vehicles, up 1.3% sequentially but down 2.1% year over year. The company delivered 478,237 Model 3/Y vehicles and 8,295 other models compared with 481,166 and 15,933 units, respectively, in the year-ago quarter. The decline was primarily concentrated in other models, whose deliveries fell 47.9%. A key factor behind the year-over-year decline is the challenging comparison with the third quarter of 2025, when Tesla delivered a record 497,099 vehicles amid a rush to purchase electric vehicles (EVs) before the expiration of the $7,500 U.S. federal EV tax credit on Sept. 30, 2025. This demand pull-forward boosted the year-ago quarter's deliveries. Despite the year-over-year decrease, Tesla's third-quarter 2026 deliveries rose 1.3% sequentially, supported by a recovery in European sales and stronger demand for China-made vehicles in international markets. China-made Model 3 and Model Y sales, including exports, increased 5% year over year in September. We expect revenues from automotive sales to be $20.69 billion, while automotive gross margin is projected at 17.3%. Vehicle deliveries, pricing and production costs are likely to have influenced the company's automotive performance in the to-be-reported quarter. Tesla's Energy Generation and Storage segment remains a potential growth driver, supported by demand for its Megapack and Powerwall products. The company deployed 13.7 gigawatt-hours (GWh) of energy storage products in the third quarter, up 9.6% from the year-ago period and 1.5% from 13.5 GWh in the second quarter of 2026. This continued increase in deployments might have supported higher energy-related revenues. We expect revenues from the Energy Generation and Storage segment to be $3.76 billion, implying 10.2% year-over-year growth. Our estimate for revenues from the Services and Other segment is $4.29 billion, indicating 23.3% year-over-year growth. Our proven model does not conclusively predict an earnings beat for Tesla this earnings season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is not the case here. Earnings ESP:Tesla has an Earnings ESP of -12.85%. The Most Accurate Estimate is pegged at 6 cents, below the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter. Zacks Rank: Tesla currently carries a Zacks Rank #4 (Sell). Here are a few players from the auto space that, per our model, have the right ingredients to post an earnings beat this time. Garrett Motion Inc. GTX is slated to release third-quarter 2026 results on Oct. 22. The company has an Earnings ESP of +1.24% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for Garrett's to-be-reported quarter's earnings and revenues is pegged at 49 cents per share and $945.6 million. GTX surpassed earnings estimates in each of the trailing four quarters, with the average surprise being 16.76%. Rivian Automotive, Inc. RIVN is slated to release third-quarter 2026 results on Oct. 29. The company has an Earnings ESP of +7.38% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for Rivian's to-be-reported quarter's loss and revenues is pegged at 66 cents per share and $1.97 billion. RIVN surpassed earnings estimates in each of the trailing four quarters, with the average surprise being 15.14%. Lear Corporation LEA is slated to release third-quarter 2026 results on Oct. 30. The company has an Earnings ESP of +3.26% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for Lear's to-be-reported quarter's earnings and revenues is pegged at $3.28 per share and $5.8 billion. LEA surpassed earnings estimates in each of the trailing four quarters, with the average surprise being 13.49%. You can see the complete list of today's Zacks #1 Rank stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Tesla, Inc. (TSLA) : Free Stock Analysis Report Lear Corporation (LEA) : Free Stock Analysis Report Garrett Motion Inc. (GTX) : Free Stock Analysis Report Rivian Automotive, Inc. (RIVN) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

It has been about a month since the last earnings report for BorgWarner (BWA). Shares have lost about 0.1% in that time frame, underperforming the S&P 500. But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is BorgWarner due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the latest earnings report in order to get a better handle on the important catalysts. BorgWarner reported second-quarter 2026 adjusted earnings of $1.42 per share, which rose 17.4% year over year. The figure beat the Zacks Consensus Estimate of $1.26 by 12.7%. Net sales increased 0.3% to $3.65 billion and surpassed the consensus mark of $3.58 billion by 1.8%. Strong cost controls supported profitability despite lower industry production and weakness in the Battery Energy Systems business. Adjusted operating margin expanded 100 basis points to 11.3%, while organic sales declined 1.2%. Gross profit rose to $721 million from $640 million in the year-ago quarter. Gross margin improved to 19.8% from 17.6%, reflecting lower cost of sales and disciplined operating execution. Adjusted operating income increased to $413 million from $373 million. Turbos & Thermal Technologies sales declined 2.6% year over year to $1.44 billion amid lower industry production. Organic sales fell 4.3%. Segment adjusted operating income slipped to $225 million from $227 million. Drivetrain & Morse Systems revenues increased 1.8% to $1.5 billion, aided by strong North American transfer-case volumes. Adjusted operating income rose to $277 million from $260 million, supported by higher sales and operating execution. PowerDrive Systems sales grew 14.5% to $665 million, including organic growth of 11.7%. Its adjusted operating loss narrowed to $29 million from $33 million, driven by higher sales. Battery Energy Systems revenues plunged 37.1% to $100 million due to weaker European demand and the absence of North American incentives. However, the segment’s adjusted operating loss narrowed to $2 million from $12 million, helped by restructuring actions and savings from the charging-business exit. BorgWarner announced seven awards spanning combustion, hybrid and electric-vehicle technologies. These included an eTurbo program for a European automaker, a torque-on-demand transfer case for a Chinese SUV and two variable cam timing programs. The company also secured an integrated drive module award using its next-generation three-in-one system. Two high-volume inverter program extensions cover plug-in hybrid and 800-volt battery-electric applications. Production for the announced programs is scheduled to begin between late 2026 and 2029. The company noted progress in data-center and industrial applications. Testing of its turbine generator achieved California Air Resources Board-level emissions standards, while component certification work is expected to begin in September. BorgWarner continues to target a 2027 launch and had previously outlined roughly $300 million of turbine-generator revenues for that year. Customer interest includes multiple hyperscalers, and management expects to decide during the second half of 2026 whether additional capacity is needed. BorgWarner is also developing energy-storage systems, microgrid inverters and power-conversion products. Four customers have received inverter samples, and the company is expanding its portfolio from 400 volts to 1,500 volts. It plans to invest an additional $10-$15 million in industrial research and development during the second half. BWA raised its full-year adjusted earnings guidance to $5.05-$5.30 per share from $5-$5.20. The company maintained its sales outlook of $14-$14.3 billion and adjusted operating margin forecast of 10.7%-10.9%. Organic revenues are expected to decline 1.5%-3.5%, including an anticipated $250 million reduction in Battery Energy Systems sales. Second-quarter operating cash flow totaled $586 million, while free cash flow was $492 million. For 2026, the company continues to expect operating cash flow of $1.6-$1.7 billion and free cash flow of $900 million-$1.1 billion. BorgWarner returned about $134 million to shareholders during the quarter through repurchases and dividends. Its board increased the share repurchase authorization by $1 billion, bringing total available authorization to approximately $1.35 billion through 2029. Cash and equivalents were $2.45 billion as of June 30, 2026. In the past month, investors have witnessed a downward trend in estimates review. Currently, BorgWarner has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock has a grade of A on the value side, putting it in the top 20% for this investment strategy. Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in. Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Interestingly, BorgWarner has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months. BorgWarner is part of the Zacks Automotive - Original Equipment industry. Over the past month, Lear (LEA), a stock from the same industry, has gained 10.1%. The company reported its results for the quarter ended June 2026 more than a month ago. Lear reported revenues of $6.21 billion in the last reported quarter, representing a year-over-year change of +3%. EPS of $4.28 for the same period compares with $3.47 a year ago. For the current quarter, Lear is expected to post earnings of $3.28 per share, indicating a change of +17.6% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.7% over the last 30 days. Lear has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of A. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report BorgWarner Inc. (BWA) : Free Stock Analysis Report Lear Corporation (LEA) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Lear Corporation LEA reported second-quarter 2026 adjusted earnings of $4.28 per share, up 23.3% year over year. Earnings beat the Zacks Consensus Estimate of $3.89 by 10.03%. Revenues rose 3% to $6.21 billion and surpassed the consensus mark of $6.14 billion by 1.17%. The quarter benefited from strong net operating performance, new Seating business and accelerated share repurchases. Core operating earnings increased 7% to $313 million, while free cash flow surged 69% to $288 million. LEA currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Lear Corporation price-consensus-eps-surprise-chart | Lear Corporation Quote Seating sales increased 3% year over year to $4.62 billion. Organic sales rose 2%, supported by the Seres M6 and M7 in China, BMW iX3 in Europe and Jeep Cherokee in North America, partly offset by lower volumes on Lear platforms in China. Adjusted segment earnings rose 4% to $311.5 million, while the adjusted margin held steady at 6.7%. Net performance and a margin-accretive backlog were offset by lower platform volumes and unfavorable foreign exchange effects. E-Systems sales advanced 2% to $1.59 billion. Organic sales declined 2% due to lower volumes on several Volkswagen programs in China and the Mustang Mach-E in North America, along with the phaseout of the Ford Escape, Focus and Lincoln Corsair programs. Adjusted segment earnings climbed to $91.3 million from $75.8 million. The adjusted margin expanded 90 basis points to 5.8%, driven by strong operating performance, partly offset by program roll-offs, discontinued product lines and lower volumes. Lear has generated about $2.9 billion of business awards year to date, including more than $2.3 billion in Seating and over $500 million in E-Systems. More than half of the awards were for new or conquest programs. Major wins included complete-seat and thermal-comfort awards with Audi, a complete-seat program with Leapmotor in South America and wire-harness awards with Renault and Chinese automakers. Lear also brought its total ComfortFlex, ComfortMax and FlexAir awards to 45. The company is on track to deliver $75 million in IDEA by Lear savings in 2026 after achieving about $35 million in the first half. Restructuring savings reached $50 million through the second quarter against a full-year target of $80 million. The company has more than 200 automated sewing cells globally. Automated seat-finishing and testing cells will deliver $14 million in annual savings. Operating cash flow increased 55% to $461 million, supported by higher core operating earnings and improved working capital. Cash and cash equivalents totaled $1 billion at quarter-end, while total liquidity was $3 billion. Lear repurchased $100 million of shares during the quarter, bringing first-half buybacks to $175 million. The company raised its full-year repurchase target to at least $350 million and had about $600 million remaining under its authorization. Lear now expects 2026 net sales of $23.54-$24.01 billion and core operating earnings of $1.08-$1.20 billion. The midpoint for revenues increased to about $23.8 billion, while the core operating earnings midpoint rose to $1.14 billion. Operating cash flow is projected at $1.25-$1.35 billion, with free cash flow of $590-$690 million. General Motors GM reported second-quarter 2026 adjusted earnings of $3.57 per share, up 41.3% year over year. The figure beat the Zacks Consensus Estimate of $3.13 by 14.06%. Revenues increased 1.9% to $48.03 billion and surpassed the consensus estimate of $46.56 billion by 3.15%. General Motors raised its full-year adjusted EBIT guidance to $14-$16 billion from $13.5-$15.5 billion. Adjusted earnings are now projected to be $12-$14 per share, up from the prior range of $11.50-$13.50. Tesla, Inc. TSLA reported second-quarter 2026 adjusted earnings of 33 cents per share, which declined 17.5% year over year. The figure missed the Zacks Consensus Estimate of 50 cents by 34%. Revenues advanced 25.5% to $28.24 billion and surpassed the consensus estimate of $25.81 billion by 9.41%. Tesla expects 2026 capital expenditures to exceed $25 billion and rise further over the next two to three years. Ford F reported second-quarter 2026 adjusted earnings of 42 cents per share, beating the Zacks Consensus Estimate of 33 cents by 27.27%. Earnings rose 13.5% from 37 cents a year ago. Automotive revenues of $44.89 billion fell 4.4% year over year and missed the consensus mark of $45.72 billion by 1.81%. Ford’s consolidated second-quarter revenues came in at $48.3 billion, down 3.7% year over year. The company raised its full-year adjusted EBIT outlook to $10-$11 billion from $8.5-$10.5 billion. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Lear Corporation (LEA) : Free Stock Analysis Report Ford Motor Company (F) : Free Stock Analysis Report General Motors Company (GM) : Free Stock Analysis Report Tesla, Inc. (TSLA) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Lear (LEA) reported $6.21 billion in revenue for the quarter ended June 2026, representing a year-over-year increase of 3%. EPS of $4.28 for the same period compares to $3.47 a year ago. The reported revenue compares to the Zacks Consensus Estimate of $6.14 billion, representing a surprise of +1.17%. The company delivered an EPS surprise of +10.03%, with the consensus EPS estimate being $3.89. While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to determine their next move, some key metrics always offer a more accurate picture of a company's financial health. Since these metrics play a crucial role in driving the top- and bottom-line numbers, comparing them with the year-ago numbers and what analysts estimated about them helps investors better project a stock's price performance. Here is how Lear performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts: Geographic Net Sales- North America: $2.5 billion compared to the $2.65 billion average estimate based on two analysts. The reported number represents a change of -0.8% year over year. Geographic Net Sales- South America: $259.2 million versus the two-analyst average estimate of $231.58 million. The reported number represents a year-over-year change of +27.5%. Geographic Net Sales- Asia: $1.13 billion versus the two-analyst average estimate of $1.16 billion. The reported number represents a year-over-year change of -1.7%. Geographic Net Sales- Europe and Africa: $2.33 billion versus the two-analyst average estimate of $2.14 billion. The reported number represents a year-over-year change of +7.5%. Net Sales- E-Systems: $1.59 billion compared to the $1.55 billion average estimate based on two analysts. The reported number represents a change of +1.9% year over year. Net Sales- Seating: $4.62 billion versus the two-analyst average estimate of $4.61 billion. The reported number represents a year-over-year change of +3.4%. Adjusted Segment Earnings- E-Systems: $91.3 million compared to the $85.77 million average estimate based on two analysts. Adjusted Segment Earnings- Seating: $311.5 million versus the two-analyst average estimate of $300.13 million. View all Key Company Metrics for Lear here>>> Shares of Lear have returned +11.8% over the past month versus the Zacks S&P 500 composite's -0.5% change. The stock currently has a Zacks Rank #2 (Buy), indicating that it could outperform the broader market in the near term. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Lear Corporation (LEA) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

This article first appeared on GuruFocus. Revenue: Sales increased 3% year-over-year to $6.2 billion, with record first-half revenue of over $12 billion. Core Operating Earnings: $313 million, a 7% increase in the quarter and approximately 9% for the first half of the year. Adjusted Earnings Per Share: $4.28, a 23% increase from the second quarter of 2025. Operating Cash Flow: Increased 55% to $461 million for the quarter. Free Cash Flow: Increased 69% to $288 million for the quarter. Seating Segment Sales: $4.6 billion, an increase of 3% from 2025, with adjusted operating margins of 6.7%. E-Systems Segment Sales: $1.6 billion, an increase of 2% from 2025, with adjusted earnings of $91 million or 5.8% of sales. Full-Year 2026 Guidance: Revenue expected to be approximately $23.8 billion, operating earnings approximately $1.14 billion, and free cash flow approximately $640 million. Warning! GuruFocus has detected 2 Warning Sign with DPMLF. Is LEA fairly valued? Test your thesis with our free DCF calculator. Release Date: July 31, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Record first-half revenue of over $12 billion, with Q2 sales up 3% to $6.2 billion and adjusted EPS up 23% to $4.28. Strong new business momentum, including significant Audi seating conquest wins and awards with Chinese automakers like Leapmotor, supporting future growth. E-Systems margins expanded 90 basis points year-over-year, driven by strong net performance and exceeding initial targets. IDEA by Lear initiatives are delivering tangible results, including automation savings, a lights-out pilot in Germany, and a new advanced manufacturing center. Raised full-year guidance for revenue, operating earnings, and free cash flow, and increased share repurchase target to at least $350 million. Global vehicle production is expected to decline nearly 2% on a Lear sales-weighted basis in 2026, with continued weakness in China. Second-half revenue is forecast to decline sequentially due to seasonal shutdowns, fewer production days, and GM full-size truck changeover. Wind-down of non-core E-Systems products and program roll-offs (e.g., Escape, Corsair) are weighing on growth and margins. Near-term growth is limited, with 2027 expected to see only modest revenue growth despite a robust backlog, due to platform headwinds. China market weakness and share shift to Chinese automakers pose risks, with domestic sales down 20% in the first half. Q: Can you unpack the first half to second half dynamics, particularly the steeper decremental margin on lost volume, and what is assumed within the performance and EPA tariff refunds?A: Jason Cardew, CFO, explained that the heavier downward conversion is due to unusual factors, including tariff refunds adding $190 million in second-half revenue with no earnings attached. Excluding that, the sales reduction is about $664 million with a 25% conversion, reflecting new business like Audi rolling on at segment margins while volume reductions on existing platforms roll off at variable margins. He also highlighted two unique second-half headwinds: the fiscal calendar shift putting fewer workdays in Q4 and GM's full-size truck changeover, which is heavily vertically integrated. Net operating performance is expected to improve by 55 basis points sequentially in the second half. Q: What is the potential for net performance to finally outweigh volume mix dynamics and grind the broader margin outlook higher, specifically for E-Systems?A: Jason Cardew, CFO, provided a detailed multiyear outlook. He noted the company is in its 2027 planning process and sees a robust 2029 backlog, likely better than '27 or '28. The full benefit of new business awards will show in 2029, with 2028 also solid. Near-term headwinds include the wind-down of noncore electronics products ($90 million this year, $235 million next year) and challenging production volumes on key programs like JLR, Ford Explorer, and Stellantis. He expects another 40 and 80 basis points of net performance in Seating and E-Systems next year, respectively, underwriting a multiyear plan of margin improvement, particularly in E-Systems, with steady improvement through the '27-'29 timeframe. Q: How should we think about the changes in the 2026 outlook versus prior guidance, and what type of cushion is left in the full-year view?A: Jason Cardew, CFO, stated that the only change on tariffs is a $40 million less impact from 301 and 122 tariffs on revenue, with no earnings impact. The primary factor influencing the guidance raise is the magnitude of weakness in China, with domestic sales down 20% in the first half. The guidance embeds continued weakness in China for the second half. The biggest wildcard is whether China steps in with incentives to recover volumes, which could push results to the high end. The low end protects against economic weakness from the Iran conflict. He believes the midpoint is balanced. Q: Regarding the Leapmotor win in South America, is this an opportunity to refill existing facilities, or does it require major new investment?A: Raymond Scott, CEO, confirmed no major investment is required as Lear has available capacity. He emphasized that the win was driven by Lear's technology, innovation, and efficiency capabilities, which are differentiating the company with both Chinese and traditional OEMs. Jason Cardew, CFO, added that Leapmotor will build the vehicle in a Stellantis facility where Lear already has seats, so capital investment is limited. This is the first of potentially several programs in the same just-in-time footprint. Q: Can you quantify the assumptions for China in the second half outlook, and how much of the volume decline is tied to that market?A: Jason Cardew, CFO, said China is the biggest challenge, with continued weakness built into guidance. He noted that Chinese automakers are offsetting weak domestic demand with increased exports. The company revised its market share change assumption from 1.5% to 3% share loss for global customers to Chinese automakers this year. However, Lear has been successful growing with Chinese automakers, with $550 million in new business awards year-to-date (almost 20% of total awards) despite less than 10% of revenue coming from them. The company is on track for 50% of China revenue from Chinese OEMs in 2027. Q: How should we think about the company's organic growth capabilities and CapEx intensity through the '28-'29 backlog inflection?A: Jason Cardew, CFO, indicated the potential to return to historical growth above market of 3-4 percentage points in the '28-'29-'30 timeframe. CapEx intensity is expected to remain steady at around 2.8% of sales, as increased automation investments are offset by 20%+ cost reductions in equipment through acquisitions of manufacturing integrators. Raymond Scott, CEO, added that the company is manufacturing its own purpose-built capital and using modular capital stations that can be flexed across product portfolios and plants, leading to significant capital efficiency improvements. Q: How should we think about margins sequentially in Q3 versus Q4, particularly with the GM launch?A: Jason Cardew, CFO, framed Q3 revenues at $5.8-$5.9 billion, up about $150 million year-over-year. He expects Seating margins in the low-to-mid 6s and E-Systems in the low 4s, both up slightly from prior year. Q3 margins will be lower than Q4 due to summer shutdowns in Europe and a gap in copper commodity recovery in E-Systems, which will show up in Q4. Ongoing commercial negotiations are the biggest swing factor for the quarter. Q: Where do you stand with local Chinese automakers, and are you on vehicles being exported out of China? Is that an opportunity or threat?A: Jason Cardew, CFO, stated that 44% of China revenues currently come from Chinese automakers, growing to 50%+ next year. The company is focused on targeting Chinese programs with export elements but is currently "a bit under-indexed" on the export front given customer mix. Longer term, localization of production is likely, and incumbency would help as programs localize. Raymond Scott, CEO, added that the company is winning selectively with domestic Chinese automakers, growing with traditional OEMs through conquest wins, and seeing opportunities with Japanese OEMs, executing on a strategy that balances returns and strategic positioning. Q: Are you talking down 2027 revenue expectations, and should we expect limited organic growth next year before acceleration later?A: Jason Cardew, CFO, confirmed that despite a more than $700 million backlog, the company expects limited growth in 2027 due to the electronics wind-down and production volume headwinds on key platforms like JLR, Ford Explorer, and Stellantis. He emphasized the company is early in the planning process with lots of moving parts, but wanted to highlight the strength of certain platforms this year that may pull back next year. Growth is expected For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Achieved record first-half revenue of over $12 billion, driven by 3% sales growth and significant margin expansion in E-Systems through net operating performance. Secured $2.9 billion in year-to-date business awards, with over 50% representing new or conquest programs, including a major multi-program seating win with Audi. Differentiated market position through 'Idea by Lear,' utilizing proprietary automation and digital tools to reduce labor intensity in sewing by 50% and targeting similar efficiencies in wire taping with production launching next year. Expanded global footprint with Chinese automakers, securing a first-ever seating program with Leapmotor in South America to leverage existing regional capacity. Maintained disciplined capital allocation by increasing the full-year share repurchase target to at least $350 million following strong free cash flow generation. Successfully piloted 'lights-out' automated manufacturing in Germany, demonstrating a scalable model for fully integrated, real-time digital production management. Raised full-year 2026 guidance for revenue to $23.8 billion and core operating earnings to $1.14 billion, reflecting first-half outperformance and higher North American volumes. Anticipates a robust 2029 backlog that exceeds 2027 and 2028 levels, as major conquest awards in seating and electronics reach full production scale. Expects 2027 to be a transition year with limited organic growth due to the wind-down of $235 million in non-core electronics products and potential volume pullbacks on key platforms. Projects continued margin improvement in E-Systems, targeting 80 basis points of net performance annually to offset legacy product exits and program build-outs. Assumes continued weakness in the China domestic market for the second half of 2026, specifically impacting global customers and select domestic automakers. Identified a significant shift in China market share, increasing the expected loss for global customers from 1.5% to 3% in favor of domestic Chinese automakers. Noted revenue headwinds in the second half of 2026 due to seasonal European shutdowns and planned downtime for GM's full-size truck changeovers. Adjusted revenue outlook to account for a $40 million impact from changes in U.S. tariff policies, though the impact on earnings remains neutral. Highlighted the strategic exit from non-core E-Systems products, which will result in a $90 million revenue reduction this year and $235 million in 2027. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management clarified that while 2027 growth may be muted by product wind-downs and platform cycling, the 2028-2029 period will see an inflection toward 3-4% growth above market. The company plans to return to providing a three-year backlog report in early 2027 due to stabilized customer sourcing cadences. The guidance raise was tempered by 'pervasive weakness' in China; management noted they would have raised the high end further if not for the 20% drop in domestic China sales. Lear is mitigating this by growing with Chinese OEMs, which now represent nearly 20% of new business awards despite being less than 10% of current revenue. CapEx is expected to remain steady at approximately 2.8% of revenue because Lear is now manufacturing its own purpose-built automation equipment. Acquisitions of manufacturing integrators have allowed Lear to reduce equipment costs by 20% or more compared to external sourcing. The Audi win is approximately 75% the size of Lear's largest-ever conquest award, representing multiple hundreds of millions in revenue starting in late 2028. The award was secured specifically due to Lear's automation capabilities and 'ComfortFlex' modular seating technology.