Benzinga | Aug 6, 2021 08:19AM EDT

Lear Q2 Earnings Misses Estimates; Cuts FY21 Outlook

* Lear Corp (NYSE:LEA) reported second-quarter FY21 sales growth of 95% year-on-year, to $4.76 billion, missing the analyst consensus of $4.91 billion. Sales were up 83%, excluding the impact of foreign exchange, commodities, and acquisitions.

* Global vehicle production increased 51% Y/Y, with North America rising 132%, Europe gaining 93%, and China falling 3%.

* Net sales from North America jumped 150.9% Y/Y, Europe and Africa gained 109.7%, Asia increased 18.6%, and South America rose 347.6%.

* Lear said Q2 industry production was impacted by component shortages, particularly related to semiconductors.

* Core operating income for the quarter was $233 million, with a margin of 4.9%.

* Lear held $1.4 billion in cash and equivalents as of July 3, 2021. Net cash provided by operating activities in Q2 amounted to $260 million with a free cash flow of $120 million.

* Adjusted EPS of $2.45 missed the analyst consensus of $2.68.

* "As expected, the second quarter was very challenging, given semiconductor supply issues that impacted the auto industry and led to significant production disruptions," said CEO Ray Scott.

* Outlook: Lear has cut FY21 sales guidance to $19.7 billion - $20.5 billion (prior $20.35 billion - $21.15 billion), versus the consensus of $20.72 billion.

* The company has also reduced the adjusted EBITDA outlook to $1.48 billion - $1.67 billion (prior $1.70 billion - $1.87 billion).

* Price action: LEA shares are trading lower by 0.53% at $168.5 in premarket on the last check Friday.