Lear LEA Earnings Analysis

Earnings Analysis Report for LEA

Revenue Analysis:

Total and Operating Revenue: LEA showed a steady increase in both total and operating revenue over the observed periods. For Q1 2023, the total revenue was $5.85 billion, which increased to $5.99 billion by Q2 2023, then slightly decreased in Q3 and Q4 of 2023 but rose again to $5.99 billion by Q1 2024.

Gross Profit Margins: The Gross Profit followed a similar trend, starting at $430 million in Q1 2023 and peaking at $457 million in Q2 2023. It slightly declined towards the end of 2023 but rebounded to $398 million by Q1 2024. This indicates fluctuating but generally increasing profitability on a gross level over the period.

Cost Management:

Cost of Revenue: There has been a gradual increase in the cost of revenue from $5.42 billion in Q1 2023 to $5.60 billion in Q1 2024, showing rising costs associated with increased revenue.

Operating Expense: Operating expenses broadly increased from $192.7 million in Q1 2023 to $201.6 million in Q1 2024. This trend suggests a consistent rise in costs required to manage and operate the business.

Total Expenses: Total expenses increased from $5.61 billion in Q1 2023 to approximately $5.80 billion by Q1 2024, inline with revenue and operating cost increases.

Profitability Analysis:

EBITDA: EBITDA showed variable movements, peaking at $389.9 million in Q2 2023 before stabilizing around $338.3 million by Q1 2024.

Operating Income: Operating income demonstrated improvement from $237.3 million in Q1 2023 to $196.5 million in Q1 2024. This improvement indicates better operational efficiency over the period despite fluctuations.

Pretax Income: Pretax income has been somewhat volatile, ranging from $199.4 million in Q1 2023 to $156.9 million in Q1 2024. This variance reflects the differing operational costs and other non-operating incomes/expenses.

Net Income: Net income available to common stockholders showed strong growth, moving from $143.6 million in Q1 2023 to $109.6 million in Q1 2024.

Cash Flow Indicators:

Reconciled Depreciation: Depreciation costs were fairly stable, ranging from $147.2 million to $155.3 million across the observed periods, reflecting consistent capital asset depreciation.

Interest Expense: Interest expenses were consistent around $25-26 million across the periods, showing stable financial costs relative to debt.

Taxation:

Tax Rate: The effective tax rates varied from 19.5% in Q2 2023 to approximately 25.8% by Q1 2024, showing changes in tax liabilities and planning.

Tax Provision: The tax provision fluctuated with income, ranging from $41.5 million to $46.7 million during these periods, correlating with pre-tax earnings.

There were no unusual tax items reported in any periods.

Shareholder Metrics:

Diluted and Basic EPS: Earnings per share (EPS) have generally increased, with diluted EPS moving from 2.41 in Q1 2023 to 2.84 in Q2 2023, then adjusting to values around 2.18 to 2.25 in the following quarters.

Average Shares: The number of shares used in calculating EPS displayed a slight increase from around 59.3 million in Q1 2023 to 59.5 million by Q1 2024.

Net Income Available to Common Stockholders: This figure closely tracked the reported net income, indicating that most of the net income was attributable to common stockholders.

Conclusion:

LEA has demonstrated consistent revenue growth, albeit with fluctuations in cost management and profitability ratios. The stable cash flow indicators suggest good management of capital assets and debt servicing. Tax rates and provisions appear well-managed, reflecting effective tax planning. Overall, LEA presents a positive outlook with recommendations for investors to consider the consistency in revenue growth and stable earnings as positive indicators for potential investment.